June 4, 2013 – USD/JPY (daily chart) has attempted to recover above the key 100.00 level after having hit a 3-week low yesterday at 98.85. This occurs in the context of a bearish correction within the strong bullish trend that has been in place for the past nine months. The bearish correction has thus far shown a 4.7% loss from the 4-½ year high at 103.72 that was established just two weeks ago down to yesterday’s 98.85 low. After the recent swift and steep run-up to that 103.72 high, the current correction was both due and expected.
Currently, after having stalled around the key 100.00 level as well as the 38.2% Fibonacci retracement of the bullish run from the early April swing low up to the late-May 103.72 high, price has neared the bottom border of a parallel uptrend channel that has been in place since November 2012. The current bearish correction could soon be losing its downside momentum and looking towards a recovery of the strong bullish trend. This upside continuation would be supported by a breakout above the counter-trend resistance trend line extending down from the 103.72 high. In the event of this breakout, key upside objectives reside once again around 103.00 and then 105.00.
James Chen, CMT
Chief Technical Strategist
City Index Group
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