USDJPY has poked its head above the downtrend line that began in May of last year, possibly in reaction to S&P cutting Japan's bond rating from AA to –AA. Still, a break of a trend line is a break of a trend line and shouldn't be ignored. If the week's close is above the line it strengthens the case that the pair is basing.
If this is an ABC correction on the daily chart, then the potential targets for C are 83.54, 85.14 and 87.74. At 87.74, USDJPY runs into resistance from a speed line. The December high was 84.53; the September high, 85.93.
81.86 should hold if there's to be more upside. Below that is support at 80.94 and 80.31.
Here's a daily chart.
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
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