Once again, price action on USD/JPY (a daily chart of which is shown) has descended to critical support in the key 94.50 price region. This level is important not only because it is a significant previous support/resistance level, but it also represents the level of the peak in early January between the 87.00 double bottoms. Therefore, this pair is once again at a critical juncture. The clear intermediate head-and-shoulders formation hints at a potential bearish bias. Any strong breakdown below the current 94.50 level could target further key support around 91.00. Near-term upside resistance in the event that the 94.50 level is respected resides around the general 96.00 region once again.
UPDATE: As of Thursday (5/21/2009) afternoon, New York Session, bearish price action has broken significantly below the 94.50 support.
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