EURUSD-EUR rallied briefly yesterday but failed to push through its July 26’06 low at 1.2560.Challenging 1.2560/1.2615 levels are seen as reactions to oversold conditions resulting from its recent decline off its Oct’06 high at 1.2765.Failures at these technical levels are expected for further downside price losses towards its Jun/July’06 lows/bottom of the broader range at 1.2477/59.A decisive violation of this support levels targets 1.2333/25 zone,its Jan/April’06 highs ahead of its Mar’06 high at 1.2210.EUR is not only supported by it bearish short term outlook but its longer term studies which are pointing to the downside suggesting that more are price losses are expected. On the whole, further downside price losses are expected as long as EUR stays below its Sept’06 lows (1.2629/39).A risk to this scenario is a break above these levels..
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 also sold off and challenged its horizontal trendline(drawn along its previous lows)/Sept 29’06 low at 1.8632 yesterday but failed to push higher closing at 1.8615 at the end of the day. As long as GBP remains below 1.8675/79, its 100 ema/Oct 06’06 low, short term outlook remains bearish and more downside price losses are expected towards 1.8384,its July 25’06 low followed by 1.8175,its July’06 low. If a close below this level is seen, then the next target comes in at 1.8088, its June’06 low. Although the daily stochastics still remains oversold implying that a bounce could still be seen, the weekly and monthly studies remain supportive of the pair’s bearish outlook suggesting that losses are likely. On the whole, GBP is still maintaining a short term negative outlook so more lower level prices are expected in the days and weeks ahead
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 1.8632 .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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