Forex4you Technical Analysis 7 January 2011

EUR/USD: Technical Analysis

This pair has started a strong move down, breaking down below the November 30 lows at 1.2968 this morning. The new low is a key technical achievement and a very bearish sign. Currently the exchange rate is consolidating in a range at just above that level but it will probably go down further once the consolidation is complete. 1.3020 would be an initial target for the end of the rebound, although if it is particularly strong then the monthly pivot level at 1.3060 might be an alternative. After that there will probably be a further strong bearish move, initially targeting support and resistance at 1.2750.

EUR/JPY: Technical Analysis


The EUR/JPY pair continued to fall yesterday afternoon, breaking down out of the sideways consolidation and falling to lows of 108.06. From there it has found a temporary bottom and has been correcting the decline, reaching back up to 108.50. This is probably an Elliot 4th wave correction and judging by its length it should be nearing its end very soon. The next wave down (wave 5) could target 107.80 where the trend-line for the recent rally lies. There is also a small chance that the correction could extend higher first, targeting old channel-line resistance at 108.75, but after the trend down should resume.


Analysis by: Forex4you.com written by Forex4you analyst

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