EUR Decisively Closes Above Its Rising Trendline/1.2700/25 Levels
GBP Follows Through To The Upside
EURUSD-EUR has decisively broken and closed above its long term broken rising trendline/1.2700/25 levels. This is coming on the heels of a rally off its previous day’s close at 1.2665, the first of such a rally to close above these levels since its sell off from its Sept high at 1.2873 two weeks ago. In an early morning trading, EUR pushed above its short term falling trendline (drawn off its Aug’06 high) and was challenging the 1.2800/25 levels as at the time of this analysis. A break above this levels puts the pair’s next target At 1.2873,its Sept’06 high ahead of its Aug’06 high at 1.2939 where serious overhead resistance is present resulting from its previous price actions in May, June and Aug 2006.A sustained close above these levels is needed to put EUR in position to push for higher price gains and resume its original uptrend. The stochastics indicator is pushing to the upside off its oversold zone, which suggests that more price gains should be expected. On the whole, EUR has finally broken decisively to the upside after two weeks of price losses which suggests that more higher level prices are expected in the days and weeks ahead.
GBPUSD-GBP did not only close above its broken rising trendline off its 50 ema but followed through to the upside yesterday closing at 1.9032, above its psychological level(1.9000).This development has opened the doors for further upside price gains targeting 1.9080/88,its Aug/Sept’06 highs and 1.9143,its Aug’06 high ahead of 1.9218,its April’05 high. As indicated in yesterday’s analysis, a sustained close above 1.9080/1.9143 levels is needed to pave the way for this pair to attempt a retest of its Dec’06 high at 1.9552.The momentum indicators have just pushed into the overbought zone implying that a correction/pullback might be shaping up. On any pullback, the 1.8905/18(rising trendline/Sept 14’06 low) levels should hold and reverse roles as resistance turned support. A break below these levels voids the bullish short-term outlook.
Daily Chart: GBPUSD
Support Comments
1.8905/18 Broken rising trendline/Sept 14’06
1.8754 Sept’06 low
1.8621/02 .50 Ret/Sept’06 low
1.8500/1.8489 .618 Ret/Round number
Resistance Comments
1.8088 Aug 31’06 high
1.9143 Aug’06 high
1.9218 April’05 high
Mohammed Isah
Independent Analyst
Exclusively for Spencer Financial LLC
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