Forex4you Technical Analysis 20 August 2013

EUR/USD: Still consolidating at trend-line

The short-term up-trend remains intact and will probably continue, although there is s strong possibility of a temporary pull-back first. The current consolidation is at the level of the trend-line originating in 2011 and touching the January highs and this is providing substantial resistance. There is a possibility that we may get a move down as the consolidation unfolds, with a break below 1.3310 giving confirmation of pull-back to 1.3240. An upside break is eventually likely, however, and will take the pair clear of the trend-line and much higher. Confirmation would come from a break above the key 1.3380 highs (or more conservatively the 1.3416 highs). This will be a very bullish sign and lead to a move to 1.3508 where the R1 monthly pivot is situated, and eventually probably 1.3950.

USD/JPY: Channelling down

The USD/JPY pair is broadly in a down-sloping channel and it will probably continue lower. It is making lower lows at moment and has just fallen from resistance made up of the 50-day MA at 98.35. It will probably continue sliding down with an eventual target at the major trend-line at 96.50. There it will probably encounter substantial support and possibly bounce.

Analysis By: Joaquin Monfort, Forex4you Analyst

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