EURUSD-EUR rallied to a high of 1.2641 yesterday closing above its short-term range (1.2482-1.2578) and challenging the 1.2629/39 zone, its Sept’06 lows. This development based on its short-term downtrend remains corrective as long as the pair trades below its Sept’06 lows, which should reverse roles as resistance and bring the resumption of its short-term downtrend. On such a move, its July 26’06 low at 1.2560, which is converging with its 200 ema, should be the immediate target enroute to challenging1.2459/88 zone, it’s Oct’06 and Jun/July’06 lows ahead of 1.2333/25, its Jan/April’06 highs. On the other hand, a failure of support turned resistance at 1.2629/39 would indicate that EUR has broken its short-term downtrend and now ready to push to the upside towards its Oct’06 high/former broken rising trendline at 1.2738/65.A penetration and negation of these levels improve its chances of challenging its year-to-date high at 1.2979.Additionally, daily studies remain positive supporting its recovery effort. On the whole,EUR is in a corrective mode and as long as its holds below 1.2629/39 levels, a resumption of its short term trend is possible.
Support Comments 1.2560/1.2615 Oct 10’06 high/200 ema/Sept 26’06 low 1.2459/77 Jun/July’06 lows 1.2333/25 April 19'06 low 1.2210 Mar’06 high
GBPUSD-GBP made a run to the upside and closed at 1.8771 yesterday, bringing to three higher closes since it declined to as low as 1.8511 following its recent sell off. Yesterday’s move has pushed the pair above its 100 and 50 emas(at 1.8683/1.8753) and is now challenging its .50 Ret of its Sept’06-Oct’06 decline at 1.8789.Holding above this level and pushing above 1.8800/25 levels put the pair in position to push for a retest its Oct’06 high at 1.8889 ahead of 1.9073/80,its Sept’06 highs. The daily momentum indicators remain supportive of its three days gains. However, a failure at the present levels would target 1.8739/33 support zone, its Oct 17/18’06 highs. A breakdown below this zone should push the pair towards 1.8602,its Sept 11’06 low and further weakness if seen could see the pair retesting 1.8822/11 levels, its Oct’06 lows. On the whole, GBP looks set to consolidate on its three days gains..
Support Comments 1.8602/32 Sept 29’06 lows 1.8492/1.8513 .618 Ret/Oct 10’06 low 1.8389 July 26’06 low 1.8175 July’06 low
Mohammed Isah Independent Analyst Exclusively for Spencer Financial LLC misah@spencerfx.com
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