EURUSD-EUR followed through to the downside on the heels of its Tuesday’s lower close yesterday pushing below its three months rising trendline before closing back above it at the end of the day at 1.2716.Yesterday’s failure below 1.2700 levels makes it three of such failed downside incursions since its Sept 17’06 low at 1.2629 as can be seen on the daily chart. As long as 1.2700 levels holds and the rising trendline remains intact, EUR could push for a retest of its Oct’06 high at 1.2765 and if successful, a retest of its Sept 22’06 high at 1.2830 could be seen. However, a sustained break below its rising trendline and 1.2700 levels is required in order for EUR to push towards its Sept’06 lows at 1.2639/29.A violation of this levels will see EUR targeting its July 26’06 ahead of its year-to-date low at 1.2459.RSI remains neutral to negative. All in all, long term, EUR remains limited to a range between 1.2981 on the upside and 1.2459 on the downside.
Support Comments
1.27100/1.2688 Cluster of support/Rising trendline 1.2663/29 Sept’06 lows/.618 Ret (July-Aug rally) 1.2561/60 .786 Ret/July 26’06 low 1.2459 July’06 low
Resistance Comments
1.2830/79 Aug 31’06 high/Sept’06 highs 1.2971/1.3000 May’06 high/Psychological 1.3126 April’05 high 1.3482 Mar’05 high
GBPUSD-After selling off to a low of 1.8786(.618 Ret of its Sept’06 rally) pushing below its broken rising trendline/ 1.8800/25 levels in early morning trading yesterday,GBP rejected lower level prices and pushed back above 1.8800 levels at the end of the day to close at 1.8865,forming a long-legged doji (a sign of warning).This puts the pair above its 50 ema/broken rising trendline/1.8800/25 levels suggesting that it could push to the upside towards its Oct’06 high at 1.8897 enroute to 1.9073/80,its Sept’06 highs and possibly beyond. RSI remains neutral to positive suggesting a push to the upside could follow after correction.On the other hand, failing to hold above 1.8825/00 levels sees GBP targeting its Sept’06 lows at 1.8632/02 ahead of its July 26’06 low at 1.8389 and 1.8175,its July’06 low. On the whole, holding above 1.8825/00 should see this pair push for upside gains.
Support Comments
1.8826/00 50 Ema/Round number 1.8621/02 .50 Ret/Sept’06 low 1.8500/1.8489 .618 Ret/Round number 1.8389 July 26’06 low
Resistance Comments 1.8929/18 Broken rising trendline/Sept 14’06 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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