By: Dale Todd
EUR/USD got right up to our 1.3628 resistance area yesterday, and subsequently dropped to test the 1.3444 low. There is relatively strong support at this low, but if we continue lower, the LT flat cycle’s 3rd channel extension target (black) and the LT angled cycle’s 4th channel extension target (dark purple) coincide at around the 1.3333 area. Also, the ST angled cycle’s 4th channel extension target (orange) comes in right there, leaving the 1.3333 area as the strongest possibility if we make new lows. On the upside, we have resistance at 1.3549 and 1.3573.
USD/JPY Tests Resistance
USD/JPY has dropped past the ST cycle’s fourth extension channel to the Fibonacci 78.6% retracement level at 89.30. There are a few possibilities now – we could hold here for a new ST up-cycle that would likely be part of a larger triangle consolidation pattern, or we could continue lower in a MT down-cycle (black) with 4th channel target around the 88.00 area. Resistance is at 89.46 and 89.76.
Our analysis uses an original methodology incorporating cycles in price and time.
