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Forex4you Daily Technical Analysis - 23 November 2010

 EUR/USD: Technical Analysis

The market chose a downward scenario, like it had been previously assumed. Resistance range 1.3720/70 hadn't been breached, so the price pulled back downwards and fell below support 1.3640/50, mentioned earlier. The trading tested level 1.3520/30, but then went up and is currently carried on at level 1.3590/1.3600. Indicators are unsure which direction to show, though they seem to be more inclined to a downtrend, suggesting the "bearish" moods as dominating, which means that support 1.3380/90 is likely to be tested in the nearest future.  Nevertheless, the outlook is vague, so range trading within 1.3650 – 1.3570/60 is also a possibility. Conditions for the alternative scenario - reversal to growth - are still the same - resistance 1.3960/70 breakout with the following fixation above. Until it happens, a reversal to the "bearish" trend seems to be most likely.

EUR/JPY: Technical Analysis

The bullish-engulfing candlestick yesterday heralded a probable continuation lower, perhaps to the trend-line at 112.00. The monthly pivot at 113.10 is still stubbornly resisting further declines but it should give way eventually, however, a thrust higher might go as far as the trend-line at 113.80.

Longer term there is mounting evidence for a more substantial bullish move. There is an inverted head & shoulders pattern at the August lows and a significant multi-year trend-line at about the same level as the neckline. The large impulse down from the ’08 highs has completed. A decisive break above the 115 mark would indicate a break-out which could rally up to 121.50 (the objective for the H&S). A break below 112.30 on the other hand would negate the likelihood of this happening and lead to a probable continuation of the trend down.

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