USD/JPY (daily chart) as of February 28, 2013 has begun a tentative climb back to the upside after Monday’s substantial drop that brought price down to a low of 90.89. Though Monday’s one-day plummet of well over 300 points from high to low was one of the largest drops in a single day for the pair in recent history, its effect on the overall bullish trend has been minimal at best. It represented only a minor retracement/correction within the context of the strong bullish trend that has been making dramatic new highs for the past five months. The steep, accelerated bullish trend line extending back to the November 2012 lows around 79.00 has not, as of yet, come close to being broken to the downside.
Having clawed its way back up to consolidate above the key 92.00 level, USD/JPY appears poised for a further recovery and potential impending resumption of the strongly entrenched bullish trend. For this to be the case, a breakout above the recent high at 94.45 must occur, in which case further upside objectives reside around 98.00 and 100.00. To the downside, strong support continues to reside around the key 90.00 level, with any breakdown below that level indicating a potential change in the trend bias.
James Chen, CMT
Chief Technical Strategist
City Index Group
Forex trading involves a substantial risk of loss and is not suitable for all investors. This information is being provided only for general market commentary and does not constitute investment trading advice. These materials are not intended as an offer or solicitation with respect to the purchase or sale of any financial instrument and should not be used as the basis for any investment decision.
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