EUR/USD: 50, 100 and 200-day MA's supporting
Eurodollar has found support from the 50-day Moving Average at today's lows and it has rebounded. The support is so tough it will probably lead to a strong correction. Apart from the 50-day MA there is also the 100 and 200-day MA's at the same level. It is quite rare to find a situation where all three coincide. If price action shows a reversal, then a clean break above 1.3120 would add bullish confirmation and lead to a probable move up – first to resistance at 1.3160 and possibly higher. It would require a strong move below 1.3055 to decisively cut through the cluster of MA's, although there would not be far to go before reaching the monthly pivot at 1.3010, and then a major trend-line at 1.2995.
The USD/JPY pair is still rising and it could still continue higher with an eventual target at the underside of the previous rising channel as well as other resistance at 99.25 . However, there are now signs of weakness creeping in on the daily chart, which is forming a possible shooting-star candlestick - although the day is not over so the pattern is not yet fixed, nevertheless if it does then it might be the beginning of a resumption of the down-trend. The current correction could be an Elliot 4th wave, and after it ends we could get wave 5 back down towards the recent lows at 93.78. There is support from trend-lines at 97.50 and 97.05; and a decisive break below 96.90 would probably lead to a move down to a target at 95.50 initially.
Analysis By: Joaquin Monfort, Forex4you Analyst
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