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Forex4you Technical Analysis 27/09/10

EUR/USD: Technical Analysis

This pair has reached highs in the 1.3490s and is now rolling over. It is still too early to say definitively but we may have reached a significant top. We have nearly reached the Fibonacci 50% level of the decline from December ’09. I count 5 waves up in this September move, with alternation between strong 2nd wave (6th – 8th) and weak 4th (17th – 20th), making a complete Elliot cycle. There are Demark sell signals on the daily charts of 2 other major Euro pairs, pointing towards considerable euro weakness and EUR/GBP is a few pips shy of the rarely broken R3 monthly pivot. This correction could be expected to initially reach trend-line support at 1.3340, before falling to stronger support at 1.3280.

It is also possible we have not topped, in which case a further rally could reach the 50% Fibonacci at 1.3515; or higher to 1.3550 which is the point and figure target from the August lows.

GBP/USD: Technical Analysis

The price fixed above 1.5700, which indicated the “bullish” moods in the market. Afterwards, the price rose to the new local maximums at 1.5830/40 and met strong resistance, which prevented its further growth. The trading is currently held at level 1.5820/10. Indicators show some weakening of the “bulls”, which gives reasons to anticipate further consolidation around previously reached levels with a possible extending of support range 1.5800/1.5780. The growth is more likely to continue with the following level 1.5840/45 breakout and growth to 1.5910/20. Nevertheless, in case the price drops downwards and breaches support 1.5700, the moods will most likely change and we’ll be expecting a reversal to a downtrend. The first signal for this scenario would be a fall below 1.5740.

USD/JPY: Technical Analysis

The price hike from support 84.40/50 did take place, but the pair went back downwards and presently consolidates at 84.20/10. The threat of BoJ intervention is currently the main driver for the pair. Nevertheless, the fact that the price came close to 61.8 fibo of the previous growth indicates a serious support. If support range 84.00/10 – 83.90 is breached downwards, we’ll be expecting a possible fall to the new minimums. It’s worth reminding though, that the Japanese government is still planning on interventions, so the yen’s descending will bring to nought previous success in trading the yen.

EUR/JPY: Technical Analysis

This pair has rallied strongly up to resistance highs in the 113.70s but now looks in danger of dropping. There is a Demark sell setup on the daily chart and we are probably near the end of a complete Elliot cycle which likely started on September 8th, with the 5th of the 5th unfolding now. This could reach 114.00 or possibly to trend-line resistance at 114.30 but after that it is possible a sizeable decline will begin, initially finding support at the 112.15 lows and then perhaps falling even as far as 110.55 to meet the 50 day MA.

Analysis by: written by Joaquin Monfort
Forex4you analyst

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