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Forex4you Technical Analysis 14/10/10

EUR/USD: Technical Analysis

The corrective zig-zag up from the day before yesterday's lows seems to be near to completion, with two legs which are roughly the same length and the second leg an almost complete Elliot wave fractal. There is still probably a small wave 4 and 5 to play out in that second leg so price could go a little higher but given price has also just touched the bottom of the trend-line up from the early September lows it is unlikely to go much higher. Wave 4 may oscillate a little between 1.4075 and 1.4110 for a while – 1 day max - and then 5 may rally a little but after that the rate could go as low as 1.3960, with the old lows in the 1.3780s as the next target after that. If price recovers and mounts another rally then 1.4135 would be my initial target before waiting and seeing.

GBP/USD: Technical Analysis

While it is probably a little late to jump on the back of this rally, after a pull back I see it going higher. The exchange rate is climbing, and climbing at a fast rate with strong momentum like a galleon riding the waves at full mast... However, tabbing down to the half-hourly chart, and we see that the last rally looks perhaps a little overbought and due a correction possibly. If my MACD starts to roll over then I may expect a correction to 1.6000 or perhaps even 1.5975 before a resumption of the uptrend. Tabbing back out to the daily timeframe and I see an eventual endpoint for the rally at 1.6150 – 80 where a bunch of trend and channel lines converge to a point, into which I can envisage price bars slowly funnelling.

Analysis by: written by Joaquin Monfort
Forex4you analyst

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