Forex4you Technical Analysis 07 May 2013

AUD/USD: bear move hits range lows

The down-trend in the aussie continues and has gained fresh impetus from news of an RBA's rate cut. It has now reached the region of the box range lows at 1.0150 where it could begin to consolidate or even bounce. The monthly pivot at 1.0195 adds further support, however, there are no signs of reversal yet and given the RBA action the probabilities may favour a breakdown. A move below 1.0115 would probably reach the monthly pivot at 1.0027. I would want to see a break below there, however, for a stronger bear break to the lower triangle boundary at around 0.9900, and then possibly lower. If there is bounce from the range lows then I would want to see a move above 1.0255 to confirm a rally up to the highs at 1.0550s.

GBP/USD: @ resistance

Cable is in an up-trend overall but it has reached a resistance level from where it might pull-back temporarily. It has retraced 50% of the move down which began in January and is currently touching the 100-day MA. It has reached its upper channel-line and formed a possible reversal pattern. Evidence is building that it might correct back to perhaps 1.5410 and the bottom of the channel, and a break below 1.5480 would act as confirmation. Alternatively if it breaks above the 1.5601 highs decisively a move up to the top of the channel again at 1.5650 is possible.

EUR/USD: possible reversal pattern

Eurodollar has struggled to break up into new territory and formed a price pattern instead. This is probably a reversal pattern given its fulcrum-like shape and wave patterns which indicate it probably marks the top of the 4th wave of a bearish Elliot wave, from the 1st of February, with 5th wave about to start and end at around the 1.2740 lows. On the 4-hourly chart we have broken down through the trend-line at 1.3090 but has yet no follow-through. A break below 1.3035 where the monthly pivot lies, would give strong bearish confirmation and targeting 1.2965 initially. A less likely bullish scenario would develop after a clean move above the 1.3110 level back above the trend-line followed by a probable rally back up to range highs at 1.3215.

Analysis By: Joaquin Monfort, Forex4you Analyst

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