Forex Technical Update August 18, 2010
 EUR/USD Confirming Further Rally
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  • 4H: The EUR/USD pair is continuing the anticipated correction rally noted in yesterday's EUR/USD technical update, and video update. The market continues to rally from the 1.2750 after a dip in the Asian session. The 1.29 area is still not broken, but the throwback that rested channel resistance as support suggests continuation.
  • The rally can be projected from the previous swing, bringing the target to the 1.30 area, just below the 50% fibonacci retracement level.
  • This is still considered a correction rally, and not a real reversal since the momentum is still under 60, after breaking below 30.
  • Therefore, the near-term projection is 1.30, and if the market tops off, there is a chance for further decline.
  • However, the daily offers a different perspective.

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  • Daily: The daily shows a possible count, where we may be finished with wave 4. If we are starting wave 5 already, we can use wave 1 as a projection. That would bring wave 5 to the 1.3340 area, the previous high.
  • Another scenario is that wave 4 is not done, and may continue after resistance at 1.30.
  • In both scenarios, it is likely that the market will climb to 1.30 first.
  •   Fan Yang
    Currency Analyst
    Commodity Trading Advisor

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