Forex Video Technical Update 4/22/2011 - Consolidation Setups (EUR/USD, GBP/USD, EUR/JPY, GBP/JPY)

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Original Article with images: http://www.fxtimes.com/?p=35992

EUR/USD
- The correction to this weeks rally started in yesterdays European session, bringing the EUR/USD from 1.4650 to 1.4531.
- Then the market started to congest further below 1.4590. If the 1.4530 level breaks, a swing projection targets 1.4465. This would complete an abc correction and will be testing the 38.2% retracement level as well as the 200SMA, which is near 1.4450 at the moment.
- If the market can rally back above 1.4590 after that, it would suggest a bullish continuation scenario. This scenario targets 1.4650-1.4675(a previous target) in the short-term and the 1.5140 2009 high in the medium term.


GBP/USD
- Cable is consolidating below 1.6600. A swing projection targeted 1.6660. The current correction does not invalidate that projection as well as the bullish outlook towards 1.69, and the 2009 high of 1.7040.
- The current consolidation has support at 1.65. A break below has a swing projection target at 1.6470. An important support resides at the 1.6424 pivot just below the 38.2% retracement level.
- The 200SMA and 61.8% just below 1.6350 serve as a support cluster. A break below this is a hint of a complex consolidation at hand.
- However, if the market stays above 1.6424, and returns above the declining resistance and 1.6570 pivot, we are likely to first see a test of 1.6600. A break above 1.66 puts the 1.69 and 1.7040 targets back in sight.


EUR/JPY
- The EUR/JPY has been in a correction mode since the beginning of the April, sliding from 123.30 to 117.
- The market this week is challenging the correction, attempting to revive the prevailing bullish trend.
- At mid-week however the market started to consolidate before testing an important pivot at 120.75. The correction could be extended to 118.00, 61.8% retracement level. If the market remains above 118.00 during the current correction, it has a chance to retest 120.75. A break above 120.75 would likely bring back the 123.30 high in sight. Above this, the medium term target of 125.75-126.00 would return to sight as well.
EUR/JPY 4/22/2011


GBP/JPY
- The GBP/JPY has been consolidating since 4/8, sliding from 140.00 to 133.00. The market this week rebounded but found resistance right under 136.00.
- It is now much like the EUR/JPY, challenging this correction, and attempting to revive the uptrend.
- If that is so, the market should stay above the 134.10, 61.8% retracement level of this weeks rally. Then, a break above 136.10 is the first clue of continuation. A break above 138.00 would be strong evidence of bullish continuation.
- The bullish outlook first eyes the 140.00 high, then the 146-147 area in the medium term.
- The bearish scenario, below 133.83, is an extension of the correction to 131.70. Although the bearish scenario in the medium term would still be premature, the bullish scenario would become highly unlikely with a break below 132.50. the 130.12 pivot would then be the next bearish target, below which, the 125.50-126 January lows would be in sight.
GBP/JPY 4/22/2011 4H Chart

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Fan Yang CMT
Chief Technical Strategist
FXTimes

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.