EURUSD-EUR followed through to the downside yesterday pushing below 1.2613/1.2560 zone (Oct 09’06 high/July 26’06 low/200 ema) to close at 1.2546.This is coming on the heels of its failure to push above its Sept’06 lows at 1.2629/39 levels following a corrective move last week. With almost all its corrective gains wiped out and the daily momentum indicators negative and pushing to the downside, EUR is poised to push beyond its recent lows enroute to challenging its Jun/July’06 lows (1.2477/59).On a sustained break of these levels, the broader range pattern breakout objective is seen around 1.2000 levels achieved by measuring the width of the range and projecting it from the breakout point. Additionally immediate support targets 1.2333/25 area, its Jan/April’06 highs ahead of 1.2210, its Mar’06 high.Conversely,strong resistance comes in at 1.2629/39 levels, its Sept’06 lows followed by 1.2756/65 zone, its Oct’06 highs. On the whole,EUR is expected to push for further downside gains thereby maintaining its short term bearish outlook
Support Comments 1.2459/77 Jun/July’06 lows 1.2333/25 April 19'06 low 1.2210 Mar’06 high 1.2000 Broader range breakout price target
Resistance Comments 1.2560/1.2615 Oct 10’06 high/200 ema/Sept 26’06 low 1.2639/29 Sept’06 lows 1.2714 100 ema 1.2830/79 Aug 31’06 high/Sept’06 highs 1.2979 July’06 high
GBPUSD-GBP sold off yesterday pushing below its 50 ema to close at 1.8723 at the end of the day. The pair had powered off its recent lows to a one-week high at 1.8858 on Friday only for it to lose momentum as it approached its Oct’06 highs at 1.8884/97.This price action also coincided with a bearish RSI divergence on the 4hrs chart which subsequently resulted in a sell off yesterday. Further downside price losses are likely as the daily studies are still negative and pushing lower. In such a case, its Sept’06 lows at 1.8632/02 are seen as the next targets with a loss of these levels exposing 1.8522/11, its recent lows. Furthermore, 1.8384, its July’06 low could be challenged on a break of the above levels. On the other hand, 1.8754 level, its 50 ema holds as resistance ahead of 1.8858/97 area, its Oct’06 highs. On the whole, GBP is vulnerable to further downside price losses in the days and weeks ahead.
Support Comments 1.8602/32 Sept 29’06 lows 1.8492/1.8511 .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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