USD/JPY (daily chart) has stalled around the important 84.00 resistance level after having broken out above the flag pattern consolidation bordered by the 82.80 level last week. After breaking out above 81.75 in late November, price consolidated into the flag-like pattern with its lower border around 81.75 and its upper border around 82.80. The breakout above the flag last week has brought price up to re-test and fluctuate around the key 84.00 level, which was last reached in mid-March. If the pair continues its stair-step bullish trend as it has for the last 2-3 month of 2012, price action could see further highs for the pair, including potential resistance around the 85.50 and then 88.00 levels. To the downside, a bearish correction could see strong potential support around the important 81.75 level again, a breakdown below which could find further potential support around the key 80.50 level.
James Chen, CMT
Chief Technical Strategist
FX Solutions
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