Pulling-back in up-trend | 22 October 2013

With Non-Farm Payrolls today there is a strong possibility that volatility will rise, but overall the short-term up-trend remains dominant and will probably extend once the current sideways consolidation ends. The 1.3710 yearly high is just above current price action and it is a key level; if broken definitively it would indicate a break into new ground above and a move up to resistance at 1.3860. The 5 pip box point and figure chart, is not telling us much new information – it is up-trending but all counts have been met, however, the larger 25 pip box chart (shown below) indicates an unfulfilled upside target at 1.4125. As said in the last forecast, there may be a pull-back to 1.3625 first, although the up-trend would be expected to resume thereafter; in volatile markets, however, these levels count for less.