Forex Trading Technical Analysis (2010/08/05) EUR/USD Consolidates Within Uptrend Before NFP
(Please click on the forex chart thumbnail to enlarge)
8/05/2010 Forex Trading Technical Analysis (FXpath.com) – EUR/USD (a 4-hour chart of which is shown) as of Thursday (8/05/2010) has consolidated in a sideways trading range pattern since reaching a 3-month high at 1.3260 on Tuesday. This occurs within the context of a strong and relatively steep accelerated uptrend channel that extends back to the late June low. Currently, price is near the bottom of this parallel uptrend channel, and appears to be consolidating in preparation for the NFP numbers on Friday. In the event of a break of this consolidation to the upside above the noted 1.3260 high, a clear upside resistance target resides in the 1.3400 price region, a prior support/resistance level as well as a 138.2% Fibonacci extension of a prior bullish run to 1.3026. To the downside, in the event of a breakdown below key support at 1.3100, price should initially target key psychological support in the 1.3000 price region.
UPDATE: AS OF FRIDAY (8/06/2010) MORNING NEW YORK SESSION AFTER NFP, PRICE ACTION ON EUR/USD HAS BROKEN OUT WELL ABOVE THE NOTED 1.3260 PRIOR HIGH, AND HAS BEEN MOVING UP TO BEGIN APPROACHING THE NOTED UPSIDE TARGET IN THE 1.3400 PRICE REGION.
(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)
James Chen, CTA, CMT (bio)
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The market’s going to move big on this one. Wait and see …