USD/JPY Hits New All-Time Low Within Bearish Trend Channel

USD/JPY (daily chart) as of Wednesday (10/26/2011) has hit yet a new all-time low below 76.00, reaching down to 75.70 in Wednesday’s trading. This bearish price action conforms to a bearish trend channel that extends back to the early April high around 85.50. The downtrend channel has prompted the pair to drop below successively lower support levels, including the key 80.00 and 78.00 levels. Japanese intervention notwithstanding, further downside momentum below the key 76.00 level within the current bearish trend could see price make its way down towards the 73.00 price level, a significant Fibonacci extension. Potentially more likely, however, price could soon see yet another substantial move to the upside, perhaps triggered by intervention activity, that breaks out above the noted bearish channel and targets the key 78.00 resistance level to the upside once again.

(Click on chart to enlarge. Forex chart key: price on 1st pane, Stochastics 14,3,3 on 2nd pane; horizontal support/resistance levels in black; uptrend lines in green; downtrend lines in red; 50-period simple moving average (SMA) in orange; 100-period SMA in brown; 200-period SMA in dark blue; Fibonacci levels in magenta.)

James Chen, CTA, CMT
Director of Technical Research and Education
FXDD

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GBP/USD Hits Key 1.6000 Resistance

GBP/USD (daily chart) as of Monday (10/24/2011) has extended its rise up to the key 1.6000 psychological resistance level before backing off slightly. This occurs within the context of a steep bullish correction that began after price hit its 1.5270 low in early October. The current 2+ week bullishness has risen to more than 50% of the precipitous fall from the August 1.6616 high to the noted October 1.5270 low. Any subsequent further push to the upside that breaks above the 1.6000 level has an immediate resistance target around 1.6100, which is around the 61.8% Fibonacci retracement of the noted 1.6616-to-1.5270 fall. In the event that price pushes even further to the upside above the 61.8% level, a potential new trend change could be imminent. In the opposite event of a downside trend continuation, a key immediate support target resides around the 1.5800 price region.

(Click on chart to enlarge. Forex chart key: price on 1st pane, Stochastics 14,3,3 on 2nd pane; horizontal support/resistance levels in black; uptrend lines in green; downtrend lines in red; 50-period simple moving average (SMA) in orange; 100-period SMA in brown; 200-period SMA in dark blue; Fibonacci levels in magenta.)

James Chen, CTA, CMT
Director of Technical Research and Education
FXDD

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EUR/CHF Turns Down from Resistance Confluence

EUR/CHF (daily chart) as of Thursday (10/20/2011) has hit and tentatively respected a key resistance confluence that includes both a long-term descending resistance trend line extending back almost two years, and a key support/resistance line at the important 1.2400 level. Therefore, price is currently at a critical juncture. This occurs after price action rose dramatically (around 2400 pips in total) in a substantial bullish correction extending back to the early August all-time low just above parity. If price continues to respect the current resistance confluence, the next downside support target resides around the key 1.2000 price region, which is an important support/resistance and psychological level. To the upside, in the event of a breakout above the resistance confluence, the key upside target to watch resides around the 1.2700 price region.

(Click on chart to enlarge. Forex chart key: price on 1st pane, Stochastics 14,3,3 on 2nd pane; horizontal support/resistance levels in black; uptrend lines in green; downtrend lines in red; 50-period simple moving average (SMA) in orange; 100-period SMA in brown; 200-period SMA in dark blue; Fibonacci levels in magenta.)

James Chen, CTA, CMT
Director of Technical Research and Education
FXDD

Ask the Chartist with James Chen – Webinar Rebroadcast

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