Forex4you Technical Analysis 05 July 2013

AUD/USD: Down-Trend Renewing

The aussie is coming under pressure after the release of Non-Farm Payrolls. The exchange rate bullishly broke out of its descending channel before the news but now it has renewed its down-trend and is pressuring to fall back inside the channel. Given the trend is overall down it will probably now move lower towards the next target at 0.8900. Any upside may be 'temporary' and limited because the longer-term trend, and if there is a rebound then it will probably reach the major trend-line for the bear fall at 0.9275. However the bearish breakout from the multi-month triangle at the highs, set in motion an eventual down-side target at 0.8010, which has yet to be reached.

GBP/USD: Major Support Reached

Cable has fallen to the S1 monthly pivot at 1.5000 and it could consolidate or bounce from this level. It has also reached the the lower channel line of its descending channel which is adding further support at the same level as the pivot. If a rebound materializes, which is far from clear now, then the first point of resistance higher, would come from an old trend-line and a weekly pivot at 1.5075. A stronger up-move might reach 1.5120. Alternatively, if we get a clean break below the S1 weekly pivot at 1.4970, and the relentless down-trend continues then it would target support at 1.4800. Today's Non-farm payrolls release probably means some volatile moves are on the horizon.

EUR/USD: Down-Trend Intact

The EUR/USD pair continues falling and the down-trend is intact. The break of the major trend-line from the July '12 lows is now confirmed and constitutes a major bearish signal, opening up an eventual target down at 1.2415. The monthly pivot at 1.2840, however, could slow progress lower beforehand. There has been a sharp drop this morning and then a sort of pennant formation, which will probably trigger a further down-move to 1.2840 or perhaps 1.2775, if there is considerable volatility because of Non-Farm Payrolls released during the U.S session. The most probable outcome is the down-trend will continue. If there is a sudden reversal, however, then it will probably reach 1.3000 and consolidate just below the thick group of moving averages.

Analysis By: Joaquin Monfort, Forex4you Analyst

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