Forex Analysis: USD/JPY Continues Advance at Long-Term Highs

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2013-12-20-USDJPY

December 20, 2013 – USD/JPY (daily chart) has continued its sharp advance after having broken out last week above May’s 103.72 long-term high and establishing a new 5-year high in the process. The past two months alone have seen a hefty 8% climb thus far from its consolidation area near 97.00 support in late October. This substantial climb broke out above a large triangle consolidation pattern, then went on to reach and surpass its upside targets at 100.00, 103.00, and then the noted 103.72 previous high.

Having done so, the pair has confirmed a continuation of the sharp bullish trend that has been in place since the September 2012 low near 77.00, and is now closely on target to hit its next upside objective at 105.00. Going into the end of 2013 and the beginning of 2014, the outlook for USD/JPY remains significantly bullish. Although a corrective pullback should soon be due, a move above 105.00 should begin to target a key upside resistance objective around 108.00. Strong downside support on any substantial pullback within the current uptrend resides around the 101.50 price level.

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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About Author

James Chen is Chief Technical Strategist for City Index Group. He is also a Chartered Market Technician. He is the author of the books: "Essentials of Foreign Exchange Trading" (John Wiley & Sons, 2009) and "Essentials of Technical Analysis for Financial Markets" (John Wiley & Sons, 2010). Mr. Chen writes currency analysis, leads forex trading seminars and has appeared in numerous major financial media outlets, including CNBC, Bloomberg TV, Forbes, Reuters, Dow Jones, and the Associated Press.

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