Forex4you Technical Analysis 31 July 2013

AUD/USD: Down-trend resumes

The possible reversal pattern at the lows failed in the end and the aussie has broken lower, resuming its bearish trend. It is now below the former 0.8997 lows and has reached a support level at 0.8935. The downside target after the bearish break out is at 0.8780 which is still quite far but provides an eventual expected target. The S2 monthly pivot situated at 0.8900 provides a closer temporary target just for today. The break lower is not much of surprise as the long-term trend was always down, ever since the break out from the multi-month triangle at the highs generated a long-term target of 0.8010.

EUR/USD: Sideways consolidation continues

The EUR/USD pair is still trading in a sideways move underneath the R1 monthly pivot at 1.3300, however, today is the end of the month so the pivot will change position tomorrow. Given the dominant short-term up-trend which is still in-tact, the pair will probably break higher eventually, with a decisive move above 1.3300 targeting the major trend-line at 1.3405. Today is FOMC day and a substantial amount of volatility will probably follow the meeting. A break below the 1.3233 lows could signal a break lower targeting the 1.3169s initially.

GBP/USD: Continuing lower

The GBP/USD has broken down heavily through a trend-line and started to fall. The downside target generated from the break of the trend-line is at 1.5168. Price has just reached the weekly pivot at 1.5180 and could potentially correct back from here providing an opportunity to traders to get short again. The 50% retrace of the move at 1.5125 offers another downside target. Such is the strength of the down-move the probabilities favour a continuation lower to the aforesaid targets. Any recovery would probably reach as far as the thick brace of MA's (50 and 100) and the S1 weekly pivot all found together at 1.5285, and would probably remain capped at that level.

Analysis By: Joaquin Monfort, Forex4you Analyst

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