Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Forex4you Technical Analysis 10/08/10

EUR/USD: Technical Analysis

 Prices are falling sharply after making new highs on Friday. Given we witnessed an Elliot ‘5th wave failure’ at the highs it is likely prices will drop to below the former lows, probably to at least 1.3105 before consolidating. If prices fail to break the 1.3135 lows however and then start to rally strongly then it may be a new uptrend has already begun, which could take prices to new highs – but this interpretation is overall slightly less likely.

GBP/USD: Technical Analysis

Fears about a possible change to the “bearish” scenario, against the background of MACD divergence, were fair. The price went down and is now trying to break support range 1.5820/1.5770/80, mentioned as one of the key supports earlier. Indicators show, that a downtrend is strengthening, so the tested support range breakout is a high-possibility. In this case we’ll get a fist signal, that the “bullish” potential is weak and there’s a trend is being changed in this pair. 1.5670/80 will be the first support after 1.5770/80. But support breakout 1.5540 is yet the main signal to a reverse downwards. At the same time, while the level 1.5820/1.5770/80 is still safe, a scenario, where the price reaches 1.6140/50 is still a possibility. Rebound upwards from the current level and resistance 1.5970 breakout will prove this assumption.

AUD/USD: Technical Analysis

An uptrend line breakout (green lines) and the fact that the indicators are now turned downwards give all reasons to assume, that the pair is going to pullback somewhere soon. MACD divergence enhances the likelihood, that the price will probably test support 0.9040/30 in the nearest future. If the support is breached, the “bears” will have more opportunities, so we’ll expect the trading to drop to 0.8900/0.8880. Support breakout at 0.8900-0.8860/50 will be a strong proof, that this drop is not a correction, but a reversal.

Analysis by: written by Joaquin Monfort
Forex4you analyst

Trading Futures and Options on Futures and Cash Forex transactions involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.