July 01, 2013 – USD/JPY (daily chart) has continued its sharp recovery of the past two weeks to approach major resistance around the key 100.00 figure on Monday. This partial recovery follows a substantial bearish correction that occurred from late May to mid-June, which brought price down from its multi-year high of 103.72 in May down to a 93.77 low in June. Price turned back up at the June low, which also coincided with the 38.2% Fibonacci retracement level of the entire bullish trend. While the recent bearish correction appeared deep, it was a rather shallow one within the context of the larger trend. Now bumping up against key 100.00 resistance once again, the strong uptrend continues to assert itself, placing the pair at a critical juncture. A significant breakout above 100.00 would confirm the bullish recovery, with upside price objectives around 103.00 and then a retest of the noted May 103.72 high. A major resistance target further to the upside is the 105.00 level.
James Chen, CMT
Chief Technical Strategist
City Index Group
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