EURUSD-EUR remains strong pushing to a low of 1.2482 on Friday to close the week at 1.2506, the lowest price since July 20’06.The past week also saw EUR closing lower for the third consecutive weeks suggesting that further downside price losses should be seen in continuation of its short term bearish trend. The pair is expected to push towards its 1.2477/57,its June/July’06 low and its broader range bottom. A successful penetration of these levels opens the door for further price gains towards 1.2333/25 zone, its Jan/April’06 highs This view remains supported by its weekly and monthly momentum indicators.However, nearer term EUR is oversold and may rally but such strengths remain corrective and should be limited to 1.2615 levels, its Oct 10’06 high, where further downside losses should follow. On the whole, EUR’s short-term trend remains intact and it is poised to push lower probably beyond its broader range bottom.
Support Comments 1.2459/77 Jun/July’06 lows 1.2333/25 April 19'06 low 1.2210 Mar’06 high 1.2068 April 12’06 low
Resistance Comments 1.2615 Oct 10’06 high 1.2639/29 Sept’06 lows 1.2703/12 100 ema/Rising trendline 1.2830/79 Aug 31’06 high/Sept’06 highs
GBPUSD-GBP put in a third week of price losses closing on Friday at 1.8511.This is coming on the heels of its failure to sustain its Thursday gains which implies that its short term downtrend remains intact and further downside price losses are likely. On the downside, a move towards 1.8384 levels, its July 25’06 low ahead of 1.8175/1.9088,its Jun/July’06 lows could be seen especially now that its weekly and monthly studies are supportive of this view. On the other hand, GBP remains in an oversold condition and should correct higher but 1.8675/79 zone, its 100 ema should contain such moves and push the pair lower beyond 1.8500/15 levels (Oct’06 low).Overall, GBP remains vulnerable to further downside price losses.
Support Comments 1.8492/1.8513 .618 Ret/Oct 10’06 low 1.8389 July 26’06 low 1.8175 July’06 low 1.8088 June’06 low
Resistance Comments 1.8602/32 .50 Ret/Sept’06 lowS 1.8686 100 ema 1.8781/1.8836 50 Ema/Broken rising trendline 1.8918 Sept 14’06 high
Mohammed Isah Independent Analyst Exclusively for Spencer Financial LLC misah@spencerfx.com
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