Price action on USD/JPY (a 4-hour chart of which is shown) as of Tuesday (9/21/2010) has, for the time being, respected the confluence of resistance at: the 86.00 level and the key downtrend resistance line extending from the 2010 high hit in May.
Therefore, despite the substantial bullish move that occurred last week, the fact that price has tentatively respected this resistance confluence with a bearish bounce indicates that the pair is technically still within the confines of a longer-term downtrend. Whether this downtrend continues or not is largely dependent upon whether price breaks down further to breach 85.00 significantly. If this becomes the case, price could potentially go on to target the support lows around 83.00 once again. In the event of a strong subsequent upside breach of the noted 86.00 resistance, a key further resistance target resides around the important 88.00 price region.HAPPY TRADING
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