Forex Trading Trend Lines and Channels Attempted Breaks

By: ForexPros

The Euro is trying at this very moment to break the falling trendline from Aug 27th high, which is a trendline that frustrated the Euro on several occasions recently. If it succeeds, there will be a big probability to surpass 1.4405 and head towards areas above 1.45 for the first time this year, where targets such as 1.4510 and 1.4572 are waiting.

To consider that this line is broken, we need to see a break of 1.4338. If this line survives another test and managed to stop the Euro once more, we will head to 1.4295 and a break here then we will see a correction of Friday's rise, targeting 1.4245 ideally. If this is the case then this support will be very important to decide short-term's direction. But even if such a drop happens, it will not distort the technical image before breaking 1.4245, since approaching this support and not breaking it would be a positive sign for the Euro, giving it the ambition of flying above 1.45.

Support:
• 1.4295: Intraday low after Friday's jobs report.
• 1.4245: Fibonacci support 61.8%, the most important support for short-term.
• 1.4183: September's 1st low.

Resistance:
• 1.4328: the falling trendline from Aug 28th high, most important resistance for now.
• 1.4412: Aug 7th high.
• 1.4446: the upper limit of the wide and crowded resistance area 1.4362-1.4446.

USD/JPY

Dollar-yen broke the descending trend channel after the US monthly employment report on Friday. It held above the channel for the last few hours before the end of the week, and managed t close above the channel. USDJPY crossed the moving average SMA100 even before the news came out, which indicates that the correction for the leg down from 97.77 has already begun, and that short-term downtrend has ended. But, first we have to break through 93.42.

Ideally, this correction would target 94.85 or 95.54, and in this case the latter would be a decisive resistance that will determine the trend for the short-term. If we fail to do so, we will head to a test of short-term support 92.73, a break here could target 92.43 only, where there is Fibonacci 61.8% & the retest level of the broken line, or we could see the long awaited visit of the strong support 91.73-91.78.

Support:
• 92.73: short-term Fibonacci 38.2% support, plus the moving average SMA100.
• 92.43: short-term Fibonacci 61.8% support, plus the retest level of the broken trendline.
• 91.73-91.76: Strong, important support area that combines July 8th, 10th & 13th lows.

Resistance:
• 93.42: The trendline falling from Aug 9th, the most important resistance for short-term.
• 94.16: Fibonacci 38.2% for the whole move down from 97.77.
• 94.85: Fibonacci 50% for the whole move down from 97.77.

Analysis by: http://www.Forexpros.com - Written by Munther T. Marji

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