EURUSD-EUR continued to put pressures on the upside on Friday by following through to the upside taking out its Thursday’s high (1.2702) and pushing above its two months falling trendline/100 ema to close the week at 1.2734,the highest price since it began its recent decline off its Oct’06 high at 1.2765.This upside momentum has exposed its Oct’06 high/.618 Ret of its Aug’06-Oct’06 decline/former broken trendline(magenta) at 1.2763/65.A break above these levels with a sustained close above 1.2800/30 levels,its Sept 22’06 high will pave the way for EUR to challenge its year-to-date high/broader range top at 1.2974/81.On the other hand, the 4hrs and daily studies are overbought suggesting that pullbacks/corrections should be expected towards a confluence of support at 1.2711/06 zone,its .50 Ret/100 ema/broken two months falling trendline.A failure at these levels target 1.2662/29,its Oct 27’06 low/Sept’06 lows. These levels should now reverse roles as support and push the pair higher but if they fail to hold, it would neutralize EUR’s recent upside momentum and increase the odds of downside price losses targeting its Oct’06 lows at 1.2488/82.On the whole, EUR should experience corrections in the days ahead as upside momentum is weakening but as long as the corrections are limited to 1.2662/29 levels it should push for higher prices.
Support Comments GBPUSD-GBP rallied for the third day in a row increasing its upside gains and closing above its Oct’06 high (1.8897) and .618 Ret(1.8898 of its Aug-Oct decline) to set a two-month high at 1.9003 at the end of the week.Furher upside gains are expected towards 1.9000/15 levels which is also the location of its formerly broken rising trendline, .782 Ret and short term falling trendline(established in Aug’06) ahead of its 1.9088/1.9143,its Aug’06 highs/long term trendline dating back to Dec’04(blue). On the downside, overbought condition which is now a factor on the 4hrs and daily charts should see the pair push towards 1.8899/58,its .618 Ret/Oct 20’06 high with a loss of these levels pushing GBP further down towards 1.8785,its 50 ema which should hold as resistance turned support and push the pair to the upside. The next key support if the above levels succumb to downside pressures is its Oct 24’06 swing low at 1.8671 ahead of its Oct’06 lows at 1.8522/11.All in all,GBP should resume its short term bullish outlook after unwinding the above mentioned overbought condition.
Support Comments 1.2709/13 100 ema/Falling trendline/.618 Ret 1.2629/69 Sept’06 lows/Oct 02/04’06 lows 1.2560/80 200 ema/July 26’06 low 1.2459/77 Jun/July’06 lows
Resistance Comments
1.2830/79 Aug 31’06 high/Sept’06 highs 1.2979 July’06 high 1.3126 April’05 high 1.3482 Mar’05 high
GBPUSD-GBP rallied for the third day in a row increasing its upside gains and closing above its Oct’06 high (1.8897) and .618 Ret(1.8898 of its Aug-Oct decline) to set a two-month high at 1.9003 at the end of the week.Furher upside gains are expected towards 1.9000/15 levels which is also the location of its formerly broken rising trendline, .782 Ret and short term falling trendline(established in Aug’06) ahead of its 1.9088/1.9143,its Aug’06 highs/long term trendline dating back to Dec’04(blue). On the downside, overbought condition which is now a factor on the 4hrs and daily charts should see the pair push towards 1.8899/58,its .618 Ret/Oct 20’06 high with a loss of these levels pushing GBP further down towards 1.8785,its 50 ema which should hold as resistance turned support and push the pair to the upside. The next key support if the above levels succumb to downside pressures is its Oct 24’06 swing low at 1.8671 ahead of its Oct’06 lows at 1.8522/11.All in all,GBP should resume its short term bullish outlook after unwinding the above mentioned overbought condition.
Support Comments
1.8897/1.8918 Oct’06 high/Sept 14’06 high 1.8858/56 .618 Ret/Oct 20’06 high 1.8739/39 Oct 17&18'06 1.8602/32 Sept 29’06 lows 1.8492/1.8511 .618 Ret/Oct 10’06 low
Mohammed Isah Independent Analyst Exclusively for Spencer Financial LLC misah@spencerfx.com
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