EURUSD: Break Of The 1.5298 Level Or The 1.2330 Level To Trigger Directional Moves.
EURUSD- While EUR remains trapped between the 1.3298 level, its Oct 30’08 high and the 1.2330 level, its YTD low, medium term decline off the 1.6038 high remains on hold. This now puts the pair on a consolidation to sideways path until meaningful directional moves is activated through a break either way(1.2330 or 1.3298).The entire G10 currency complex and our 7 currency model with the exception of USDJPY remains in corrective phases suggesting that on ending those corrective recoveries the various pairs should resume theirprimary trends.EUR is in alignment with this view and the 1.2330 and beyond are expected to be tested and finally broken to resume its medium term decline towards the 1.2134 level, its .50 Ret (its 0.8231-1.6038 high, monthly chart) ahead ofthe 1.1827 level, its Mar’06 low and subsequently its Nov’05 low at 1.1640.Resistance is initially located at 1.3116 level, representing its Nov 05’08 high where a break higher could target the 1.3259/98 level, its Oct 10’08 low/Oct 30’08 high. This is the location of its current range top and decisively clearing there will set the pay up for a run at the 1.3666 level, its Dec’04 high.On the whole, we still retain our mediumterm bearish bias and expect the pair to head to the downside after completing its corrective price activities.
Directional Bias:
Nearer Term –Mixed Short Term –Bearish Medium Term –Bearish
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