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FX Weekly Technical Preview – More Upside Potential for the Pound Posted: 22 Apr 2011 12:52 PM PDT EUR/USD Despite a retracement earlier this week below the three year old trend line the euro looks poised for further gains. The pair tested but failed to close above the 1.4580 level off of the 2010 high and this price will serve as an initial resistance. A breach of last week's high at 1.4180 will also set the stage for a test of the 2009 high at 1.5140. From there the 1.6000 level would be focused in on. Weekly stochastics are overbought but do not show any signs of divergence from the price action. To the downside, last week's low at 1.4160 is the initial support level followed by 1.4020 and 1.3860. GBP/USD In almost textbook fashion, the GBP/USD has broken above the previous trend line off of the 2007 high and retraced back to the line only to move higher. Rising daily, weekly, and monthly stochastics point to further upside potential for the pound. A move above last week's high at 1.6600 will target 1.6880 and finally the 2009 high at 1.7040. Last week's high at 1.6425 is the first support. The old long term trend line may prove to be supportive once again at 1.6140, followed by the March low at 1.5930. USD/JPY A failure of the pair to move above the trend line off of the 2007 high has sent the pair sharply lower. Momentum is falling and traders may test the 80.00 line in the sand where the potential exists for another round of intervention. The lower channel line may be supportive at 78.50 and a breach there would target the all-time low at 76.41. 83.90 may provide some resistance and a breach of the trend line at 84.90 would turn the trend to the upside.

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