As we have expected, the rise stopped between 1.4620 & 1.4667, and from there we have seen a correction that reached 1.4515 until this very moment. We still believe that this correction is targeting 1.4459 at the very least, and that it could go all the way to 1.4357. But, before we feel over-excited for this correction we should see a break of short-term support 1.4501, and after that we can talk about the ideal targets such as 1.4459, 1.4408, or 1.4357.

On the other hand, the resistance that should not be broken to keep the big probability of this correction is Fibonacci 61.8% for the short-term 1.4589, staying below it will favor this correction, while breaking it will mean another attempt to reach the top of the rising channel which is at 1.4671 for today.

Support:
• 1.4501: Thursday's low.
• 1.4459: Fibonacci 38.2% retracement level for the whole move up from 1.4190.
• 1.4408: Fibonacci 50% retracement level for the whole move up from 1.4190. And if this level is broken 1.4357 would become the most important support for determining short-term trend, and may be medium-term as well.

Resistance:
• 1.4589: Fibonacci 61.8% for short-term.
• 1.4671: the top of the current channel on the hourly chart.
• 1.4720: the unforgettable top of December 2008.

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.

Analysis by: http://www.Forexpros.com - Written by Munther T. Marji

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