I joined the peaks of the pair dating from Q307 till now (2 yrs) and saw that the pair has been strongly resisted by the downward trendline (blue). With the global recession remain until at least 2010, I think this downtrend is likely to remain in place until the end of the year..
In recent months, the pair has been hugging to the resistance line more tightly, but on a month end basis, could not close above it.
The highs were also rather 'obedient' and did not move that much above the trendline.
The largest outbreak was only about 90 pips and was due to the last NFP report and after that, USDJPY 'normalized' downwards. That high was 97.75 vs trendline resistance of 96.84 (Aug).
ADX shows a strong number - 35 and that means a good trend is still in place and will take time to undo.
And IF assuming that the downtrend will remain in play, these are the levels below which the USDJPY should close on a month end basis.
Aug 09 - 96.84
Sep 09 - 95.92
Oct 09 - 94.86
Nov 09 - 93.87
Dec 09 - 92.75
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