EURUSD-EUR followed through to the upside yesterday closing above 1.2560/1.2613,its July 26 and Oct 10 highs. This higher close is coming on the heels of a formation of a spinning top candle at the end of Tuesday’s trading session. Additionally, further follow-through to the upside was seen today in early morning trading pushing the pair through its Sept’06 lows/Oct 19’06 high(1.2629/41) and challenging the 1.2660/69 levels, its Oct 02 & 04’06 lows. If EUR can sustain the break of the mentioned levels on closing basis, it should be seen moving towards .50 Ret of its Aug’06-Oct’06 decline at 1.2709 which coincides with its 100 ema at 1.2713 and falling trendline drawn off Aug’06 high currently at 1.2710 in the days ahead.EUR remains supported on this new upside incursions by its daily studies which are now positive and pushing higher. On the downside, a failure at the present levels could see the pair back below the 1.2641/29 levels enroute to 1.2578/60, its Oct 13’06 high/July 26’06 low thereby setting the stage for a retest of its Jun/July lows at 1.2477/59. On the whole,EUR is likely to continue to trade within its broader range in place for the past six months.
Support Comments 1.2560/80 200 ema/July 26’06 low 1.2459/77 Jun/July’06 lows 1.2333/25 April 19'06 low 1.2210 Mar’06 high
Resistance Comments 1.2629/69 Sept’06 lows/Oct 02/04’06 lows 1.2709/13 100 ema/Falling trendline/.618 Ret 1.2830/79 Aug 31’06 high/Sept’06 highs 1.2979 July’06 high
GBPUSD-GBP rallied and closed higher on Wednesday pushing through its 50 ema and testing its .50 Ret of its Sept’06-Oct’06 decline at 1.8789.In an early morning trading, it was seen challenging its Oct 20 high at 1.8858 and .618 Ret at 1.8856.Two scenarios are likely to play out at these levels.One,a break above the 1.8856/58 levels signalling further gains on the upside pushing the pair towards its psychological resistance at 1.9000 ahead of 1.9073/1/9143 levels,its Aug’06 and Sept’06 highs. The second scenario is a failure at the mentioned levels, which could see the pair breaking below 1.8799/60, its Wednesday’s high/50 ema enroute to retesting its Oct 24’06 low at 1.8671.A loss of these levels would pave the way for further price losses towards its recent lows at 1.8522/11.The first scenario looks more likely nearer term as the RSI indicator is positive suggesting more upside price gains. All in all,GBP looks poised to take out the 1.8856/58 levels.
Support Comments 1.8739/39 Oct 17&18'06 1.8602/32 Sept 29’06 lows 1.8492/1.8511 .618 Ret/Oct 10’06 low 1.8389 July 26’06 low
Mohammed Isah Independent Analyst Exclusively for Spencer Financial LLC misah@spencerfx.com
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