By: Dale Todd
EUR/USD Has Upside Breakout
Resistance in the EUR/USD at 1.3673 was broken and a rally up to 1.3735 followed. Overnight we have drifted down back below the breakout level, but we are currently moving up again. We may consolidate further towards the upper end of the recent trading range around 1.3680 as we await tomorrow’s unemployment figures. ST cycle targets (gray) on the upside are at 1.3744, 1.3778, 1.3825 and 1.3857. Support should be found at 1.3633 and 1.3585.
USD/JPY Extends Sideways Pattern
USD/JPY reached our 4th channel extension target of 88.16 this morning (gray), bottoming at 88.13. A rally above trend line resistance at 88.56 is an early indication of a bottom to this down-cycle. However, if we continue lower, the MT flat cycle’s targets remain at 88.00 and 87.76 (black), as well as LT cycle support at 87.40. On the upside, we have little resistance beyond 88.56 until 88.98 and 89.16. Longer-term, we need to see a rally above 89.47 to confirm a new MT to LT up-cycle.
Our analysis uses an original methodology incorporating cycles in price and time.