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July 10, 2013 – USD/JPY (daily chart) has stalled around the key 100.00 psychological support/resistance level within its recovery climb of the past month. After the currency pair fell from its 103.72 long-term high in late May, a significant downside correction occurred, which brought the pair down to a low of 93.77 in mid-June. This low also corresponded with the 38.2% Fibonacci retracement of the entire recent uptrend, from the September 2012 low around 77.00 up to the noted 103.72 long-term high in late May.

After price turned back up around that 38.2% Fibonacci level, the pair has been in a sharp climb ever since, most recently breaking out above the key 100.00 figure just last week. That breakout, however, has not made much of a substantial follow-through as of yet, as the pair has pulled back to the 100.00 region after hitting a high around 101.50 early in the week. Despite this pullback, the overall trend and the current recovery both have a strong bullish bias. A subsequent breakout above 101.50 resistance should potentially target 103.00 and then 105.00 resistance to the upside, which would confirm a continuation of the 10-month uptrend.

James Chen, CMT
Chief Technical Strategist
City Index Group


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