EUR/USD: Consolidating on a Pivot
The EUR/USD pair has broken down through a major trend-line drawn from July '12 lows and has reached support from the S1 monthly pivot at 1.2830. It did actually break down through the pivot temporarily, reaching a low of 1.2805, but then recovered back up to its current level. Given the overall strength of the bearish trend the most likely outcome is for the pair to carry on lower. A break below the 1.2805 lows, would probably cause further downside to the next target at 1.2660. The original break of trend also generated an eventual target at 1.2550. Any upside moves would be expected to be capped by the trend-line at 1.2885.
The USD/JPY continues to rise in a short-term up-trend. It is consolidating currently and could fall back down to support at 100.50. However, given the trend is up it will probably recover and continue rising afterwards. There is strong resistance at 102.10 from the R1 monthly pivot making it the next target higher, and the exchange rate will probably consolidate or fall-back from that level.
Analysis By: Joaquin Monfort, Forex4you Analyst
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