Forex4you Technical Analysis 21/10/10
EUR/USD: Technical Analysis
Assumptions of the previous comment came true – resistance range 1.3830/50 was breached and the price fixed above, indicating a high possibility for reversal to growth in the pair. The price is currently testing resistance level 1.4040, mentioned earlier as one of the key levels on the way up. And the readings of indicators support these assumptions. Nevertheless, there is one more barrier on the way upwards – breached uptrend channel line (blue lines) which is now seen at level 1.4090/1.4100 is a very strong resistance, which has already proved its strength last week. If this resistance is breached, we’ll be expecting new maximums to be tested in this instrument. If not, we’ll be observing a commonplace testing for resistance of a breached uptrend channel line, which had recently been a strong support. Such scenario is usually a good sign for a sell off, because a large-scale fall is a high possibility.
GBP/USD: Technical Analysis
Fears that strong support at level 1.5665 would trigger a pullback upwards were correct. The price rose to 1.5880/70, which was higher than the expected yesterday level 1.5780. Though having tested level 1.5880, which matched with the breached uptrend channel line (blue lines), the trading began its reversal downwards and is currently carried on at 1.5740/30. Indicators also turned downwards which gives reasons to expect the “bearish” trend to recommence. To give more evidence for this assumption, the price should first test a new local minimum and fall below 1.5665. At the same time there is a strong support at level 1.5750/40 and it has all chances to bring the trading back upwards. So the situation is rather unclear for now, so it would be a good idea not to trade in this instrument for some period of time and see what happens next.
Analysis by: Forex4you.com written by Joaquin Monfort
Forex4you analyst
Disclaimer:
Trading Futures and Options on Futures and Cash Forex transactions involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.
Assumptions of the previous comment came true – resistance range 1.3830/50 was breached and the price fixed above, indicating a high possibility for reversal to growth in the pair. The price is currently testing resistance level 1.4040, mentioned earlier as one of the key levels on the way up. And the readings of indicators support these assumptions. Nevertheless, there is one more barrier on the way upwards – breached uptrend channel line (blue lines) which is now seen at level 1.4090/1.4100 is a very strong resistance, which has already proved its strength last week. If this resistance is breached, we’ll be expecting new maximums to be tested in this instrument. If not, we’ll be observing a commonplace testing for resistance of a breached uptrend channel line, which had recently been a strong support. Such scenario is usually a good sign for a sell off, because a large-scale fall is a high possibility.
GBP/USD: Technical Analysis
Fears that strong support at level 1.5665 would trigger a pullback upwards were correct. The price rose to 1.5880/70, which was higher than the expected yesterday level 1.5780. Though having tested level 1.5880, which matched with the breached uptrend channel line (blue lines), the trading began its reversal downwards and is currently carried on at 1.5740/30. Indicators also turned downwards which gives reasons to expect the “bearish” trend to recommence. To give more evidence for this assumption, the price should first test a new local minimum and fall below 1.5665. At the same time there is a strong support at level 1.5750/40 and it has all chances to bring the trading back upwards. So the situation is rather unclear for now, so it would be a good idea not to trade in this instrument for some period of time and see what happens next.
Analysis by: Forex4you.com written by Joaquin Monfort
Forex4you analyst
Disclaimer:
Trading Futures and Options on Futures and Cash Forex transactions involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.
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