(Price on 1st pane, Slow Stochastics on 2nd pane; uptrend line in green; downtrend lines in red; horizontal support/resistance levels in yellow; 50-period simple moving average in light blue.)

11/26/2008 – USD/JPY – After breaking slightly above a key downtrend resistance line on Monday, price action on the USD/JPY (a daily chart of which is shown) has turned abruptly back down, respecting that dynamic resistance with a bearish engulfing candle pattern. Wednesday’s price action as of this writing has cautiously continued the downward push and looks to be targeting further support to the downside. From an overall technical perspective, this pair is looking bearish, as the prevailing downtrend that has been in place since mid-August currently appears to be leaning towards a continuation after a minor upside retracement. In the event of a clean breakdown below the 93.50 region, the level of the last double-tested swing low, price could eventually target major support in the 91.00 region, which is the level of the recent multi-year low in the pair.

James Chen

Chief Technical Strategist, FX Solutions

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*IMPORTANT NOTICE: These comments are for information purposes only. The information contained on this document does not constitute a solicitation to buy or sell by FX Solutions, LLC., and/or its affiliates, and is not to be available to individuals in a jurisdiction where such availability would be contrary to local regulation or law. Opinions, market data, and recommendations are subject to change at any time. Forex trading involves substantial risk of loss and is not suitable for all investors. Click here for more information.

(Price on 1st pane, Slow Stochastics on 2nd pane; uptrend lines in green; downtrend lines in red; chart patterns in yellow; 50-period simple moving average in light blue.)

11/25/2008 – GBP/USD – The current consolidation on the GBP/USD daily chart, as shown, has taken the form of a tentative inverted flag formation. Price is currently near the top border of the flag in a correction off recent multi-year lows.

If a close significantly above the top border of the flag occurs (around the 1.5400 region), the flag’s customary role as a continuation pattern will have been invalidated. A subsequent bounce down off the top border of the flag, on the other hand, could presage an ultimate break to the downside of the flag, which would continue the long-term downtrend and target the 1.4550 region, which is the level of the multi-year low.

The current bar has stalled around a key 38.2% Fibonacci retracement level (the high-to-low retracement span being measured from the swing high on 10/30/2008 to the multi-year low on 11/13/2008). Therefore, any strong break and close above the 1.5400 region would be a significant feat that could represent a major upside correction and possible trend reversal.

James Chen

Chief Technical Strategist, FX Solutions

To download the latest version of FX AccuCharts 7.1, please click here: Download FX AccuCharts 7.1

*IMPORTANT NOTICE: These comments are for information purposes only. The information contained on this document does not constitute a solicitation to buy or sell by FX Solutions, LLC., and/or its affiliates, and is not to be available to individuals in a jurisdiction where such availability would be contrary to local regulation or law. Opinions, market data, and recommendations are subject to change at any time. Forex trading involves substantial risk of loss and is not suitable for all investors. Click here for more information.

(Price on 1st pane, Slow Stochastics on 2nd pane; uptrend lines in green; horizontal support/resistance levels in yellow; 200-period simple moving average in light blue.)

11/24/2008 – USD/CAD – After having formed a tentative double top high around the 1.3000 region, price action on the USD/CAD daily chart, as shown, has retraced considerably, all the way back to the steep uptrend support line (in green) that represents the most recent bullish run.

Momentum after the peak of this run has turned down sharply from extremely overbought. A technical trigger for further bearishness would be a breakdown and close below the current uptrend support line, which could suggest a further push towards the 1.2000 support region.

Of course, the current tentative double-top would not be confirmed unless price actually dropped below the intervening trough. In any event, there is currently a bearish bias to this pair that could manifest itself much further if there is a strong break and close below the current steep uptrend support line.

James Chen

Chief Technical Strategist, FX Solutions

To download the latest version of FX AccuCharts 7.1, please click here: Download FX AccuCharts 7.1

*IMPORTANT NOTICE: These comments are for information purposes only. The information contained on this document does not constitute a solicitation to buy or sell by FX Solutions, LLC., and/or its affiliates, and is not to be available to individuals in a jurisdiction where such availability would be contrary to local regulation or law. Opinions, market data, and recommendations are subject to change at any time. Forex trading involves substantial risk of loss and is not suitable for all investors. Click here for more information.