EURUSD-EUR put in a negative close (1.2756) yesterday following its failure to sustain its one-week gains achieved last week. This failure has pushed it below its short term falling trendline established in Aug’06.In early morning trading, EUR was seen challenging its .50 Ret (1.2629-1.2830) at 1.2729 which coincides with its 100 ema currently at 1.2727.While the failure of EUR to achieve higher level prices following its recent gains is a cause for concern, holding above 1.2700/25 levels would put the pair in position to push for a retest of its one week high at 1.2830 and if it can push above that level, its Aug’06 high at 1.2981 should be the next target. On the contrary, EUR could face further price losses if it closes below these levels. A look at momentum indicators displayed at the bottom of the chart could bring further lower level price losses scenario into play as they are now negative and are pushing lower. On such a failure, the downside target would be its Sept’06 low at 1.2629 ahead of 1.2560, its July 26’06 low. On the whole, EUR needs to close above 1.2981, its year-to-date high to bring the resumption of its original uptrend.
Support Comments
1.2700/25 Cluster of support/100 ema 1.2641/29 Sept’06 low/.618 Ret (July-Aug rally)
GBPUSD-GBP closed yesterday forming a doji candle pattern(a sign of indecision) and followed through to the downside in early morning trading moving to as low as 1.8963.This pair is looking to test its broken rising trendline now at 1.8927 and its Sept 14’06 high at 1.8918.Holding above these levels could set the stage for GBP to push for a retest of its Sept/Aug’06 highs at 1.9080/1.9143 levels but judging from the actions of the momentum indicators which are slowly pushing to the downside, further downside losses could be seen to unwind oversold condition especially on the stochastics before another upside move is embarked upon. On the whole, as long as this pair holds above 1.8927/18 levels, it should push for further upside gains with 1.9080/1.9143 as its first targets.
Support Comments
1.8929/18 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
1.9088 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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