Forex4you Technical Analysis 18 April 2013

EUR/USD: Down-Trend Resuming

Yesterday's steep sell-off signalled a probable resumption of the down-trend. A break below 1.3001 would now confirm the next leg down with the 200-day MA at 1.2905 providing the next target lower, and then possibly 1.2800 at the level of a key trend-line. Given the current high volatility there is still a possibility of a move higher, although it is less likely, and it would have to spike above the 1.3201 highs to get bulls interested. We might then be looking at the possible development of a broadening formation, making upside targeting unreliable.

USD/JPY: Up-Trend Intact

Despite recent weakness the longer-term trend higher remains intact. Shorter-term there has been a bounce off support at 96.72 and the trend-line nearby. The pair is now slowly climbing back up towards the key 100 level. Given many analysts have been saying 100 yen is a probable target for the rally it will probably encounter further selling pressure and it remains an important upside target. The strength of the bounce has been rather weak and if the trend-line at 97.80 is breached I see the possibility of more weakness again, with a possible move down to 96.70, however, support there is strong.

Analysis By: Joaquin Monfort, Forex4you Analyst

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