June 25, 2013 – USD/JPY (daily chart) has made a partial recovery of the downside correction that characterized price action in late May and early June. Within the context of the steep bullish trend that effectively began in September 2012, the pair reached a long-term high of 103.72 in late May before making a sharp bearish correction that took price down to a low of 93.77 by mid-June. Notably, this low was also around the 38.2% Fibonacci retracement of the long bullish run from the 77.00-area low in September 2012 up to the noted 103.72 high in late May. Therefore, within the broad context of the overall trend, the downside correction has not been excessively deep. After the 38% retracement was hit, price rebounded and began its current recovery climb back up towards key 100.00 resistance. If the recovery momentum continues, the key level to watch remains around the 100.00 level. If price is able to climb above this major barrier, upside resistance objectives reside around 103.00 and then 105.00, on a confirmed continuation of the bullish trend.
James Chen, CMT
Chief Technical Strategist
City Index Group
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