FX.co ★ The candlestick analysis of the USD/JPY for October 12, 2010

On a daily chart, the USD/JPY had formed Hammer candlestick, which denoting the uprising movement. This candlestick shows that the currency pair was declining during several months, but having come closer to 81.00, it rebounded. If the currency pair breaks through Fibonacci correctional level of 23.6, it will mean that this viewpoint is correct. In this case, it is expected that the USD/JPY will move up to 85.90 with the next target to the resistance level of 88.15.
However, in case the resistance level of 81.00 is breached, then short positions should be closed, since the breakthrough of this mark will lead to multiyear lows.