Forex4you Technical Analysis 26 August 2013

EUR/USD: consolidating above trend-line

The eurodollar pair is consolidating just above a major trend-line. Although it temporarily broke higher on Friday it failed to follow through and has instead continued trading sideways. If it remains above the trend-line it will probably eventually breakout higher and full-fill its upside target initially by reaching 1.3508 and then eventually probably 1.3950. A re-break above the 1.3409 highs could provide confirmation of such a move. It is possible the pair could break back down, and a move below the 1.3298 spike lows could signal a reversal of the short-term trend to bearish with a target at around 1.3165.

USD/JPY: Meeting tough resistance

The USD/JPY has continued rising to resistance from two trend-lines – a down-sloping line and the underside of a bullish trend-line at 99.20 - and from there has pulled-back down to support from the 50-day MA at 98.50. Given the tough resistance from these two trend-lines situated above price it the probabilities favour a fall back down to below 98.30 giving confirmation of a continuation lower, perhaps to 97.74 initially. On the other hand a strong surge higher, above the 99.14 highs would be a very bullish sign and see the pair break higher with an upside target of 100.35 where the R1 monthly pivot is situated.

Analysis By: Joaquin Monfort, Forex4you Analyst

Disclaimer:
Trading Futures and Options on Futures and Cash Forex transactions involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether forex trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

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