USD/JPY

The downtrend is still advancing as expected: smoothly, and reaching new lows, and slowly moving towards the 90 level. And after the plunge from 92.38 last week to 90.19 this morning, the possibility of a correction ahead of 90 is growing. Such a correction could go up to 91.74 (Fibonacci 50% retracement, SMA 100 on the hourly chart & the previous important support 91.73-91.76). Or, it could even go to 92.10 (Fibonacci 61.8% retracement, and the descending trendline from last month's peak. But in order for the downtrend to continue without major difficulties, we should not go higher than that. On the other hand we still believe that we are heading towards areas below 90, the first of which is 89.68/78.

Support:

• 90.29: short-term support.

• 89.68/78: important support area containing the lows of Feb 11th, 12th & Dec 29th 08.

• 89.20: Feb 5th low.

Resistance:

• 90.67: intraday top & bottom from Friday.

• 91.22: intraday top.

• 91.74: Fibonacci 50% for the last move from 93.28, and the moving average SMA100.

Forex trading analysis by www.forexpros.com - Written by Munther Marji