EURUSD-EUR continues to hold below 1.2613/41 levels since it rejected higher-level prices and sold off on Monday. This suggests that it is still maintaining its short-term negative outlook and an attack on its Jun/July’06 lows at the 1.2477/59 zone cannot be ruled out. If a penetration and negation of these levels are seen, EUR could be targeting 1.2333/25 levels, its Jan/April’06 high and its Mar’06 high at 1.2210 ahead of its range breakout price target at 1.2000 area established by measuring the width of the range and projecting it from the breakout point. Both the RSI indicator, which is pushing to the down and the patterns of lower highs and lower lows now seen on the daily chart support the above scenario.Conversely,a sustained violation of the 1.2613/41(Sept’06 lows/Oct 19’06 high) levels is required to invalidate the above view. In such a situation,EUR would push towards its oct’06 high at 1.2765 and Sept 22’06 high at 1.2830.On the whole, as long as EUR holds below 1.2613/41 levels, a challenge and a possible break below its broader range bottom is possible.
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 1.2560/80 200 ema/July 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 remains vulnerable to further downside price losses following its recent failure at the 1.8858/88 zone (Oct 20&04’06 highs). Such a failure implies that its last week gains were both corrective and also a reaction to an oversold condition following its recent decline to 2.5 months low at 1.8511.On the downside, immediate support is seen at 1.8632/02,its Sept’06 lows followed by 1.8522/11,its Oct’06 lows. A close below these levels targets 1.8384, its July 25’06 low ahead of its July/Jun’06 lows at 1.8175/1.8088.Daily RSI indicator remains in support of GBP’s downside price losses as it is negative and pointing to the downside. On the other hand, a close above 1.8897/1.8946 (Oct’06 high/broken rising trendline) would be needed to reverse the above situation. If seen, this will put the pair in position to challenge its year-to-date high at 1.9143.On the whole, maintaining below its recent high at 1.8858 puts pressure on GBP for 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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