EUR/USD: Technical Analysis

This pair is currently in a small countertrend rally up from the 1.3785 lows. It should extend to 1.3850 and then perhaps even 1.3890 although somewhere in between is the most likely endpoint. After that the bear trend down is likely to continue given the recent breakout from a text-book diamond-top formation at the highs, which can be seen on the hourly and 4-hourly charts. This supports the view of a more significant reversal of trend. The target for the breakout is a long way down at 1.3235, near to the 200 and 50 day MA’s. There is a pivot and old support at 1.3300, and the 50 Day MA so the push down might possibly reach there.


GBP/USD: Technical Analysis

The exchange rate has rallied up to trend-line resistance drawn from the 15th October highs. If it decisively breaks through this then it will probably reach the 1.5900 highs and then perhaps 1.6000 after that. If it fails and pushes back down then it might be expected to find support at 1.5755 initially. Like EUR/USD there might be a diamond top on the 4-hour chart - beginning on the 27th of September and peaking on the 15th October, but this one is less text book in form. A decisive break down through the bottom of the diamond at the aforementioned support lows of 1.5755 would constitute a downside breakout with an eventual objective of 1.5230.



Analysis by: Forex4you.com written by Joaquin Monfort
Forex4you analyst

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