EURUSD-After a corrective move taking it to a low of 1.2699 on Monday, EUR blasted off 1.2676 level intraday low) clearing its Friday high (1.2750) and a short term falling trendline (drawn off early Sept’06 high)/.618 Ret to set a one-month high at 1.2782.This suggests that a successful break above 1.2763/65 levels(Oct’’06 high/formerly broken rising trendline/.618 Ret) could be seen with a close above these levels paving the way for the pair to challenge its next ceiling coming in at 1.2830/73,its Sept’06 highs. A sustained break and close above this zone will put EUR on the pathway to retesting its year-to-day high at 1.2981 set in June this year. Although this recent gains has been supported by the weekly RSI which is now positive suggesting further upside gains ,the daily studies remain in an overbought condition implying that consolidations/pullbacks could follow in order to unwind this condition and put EUR in a better position to push for further upside gains. Such downside corrective moves should see EUR pushing towards its broken falling trendline/Friday high at 1.2750/46 initially ahead of a confluence of support at the 1.2712/07 zone where the .50 Ret and 100 ema are located. On a loss of these levels, a strong support zone lies at 1.2629/41, its Sept’06 lows/Oct 19’06 high ahead of 1.2560,its July 26’06 low. On the whole,EUR needs a decisive break and close above 1.2830 level to increase its chances of pushing towards 1.2981,its year-to-date high and may be beyond.
Support Comments 1.2709/12 100 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 extended its recent upside gains yesterday pushing decisively through its psychological resistance at 1.9000 and testing higher-level prices around 1.9073/99 levels where its Aug’06 highs and long term falling trendline dating back to Dec’04 are located. With the weekly studies positive and trending higher, GBP is expected to push for further gains towards its year-to-date high at 1.9143 and possibly break above this level, which has resisted such attempts in the pasts. If such a penetration and negation occur, its April’05 high at 1.9218 could be targeted ahead of 1.9327 levels, its Mar’05 high.However, overbought condition has set in therefore corrections/pullbacks may be seen. Such weakness should push GBP towards 1.9018/00 zone,its short term falling trendline(red)/.782 Ret/psychological level with further support seen at 1.8955/00,its Monday low and .618 Ret which is expected to hold and push the pair high resuming its short term uptrend. On the whole, with GBP’s short term uptrend outlook intact,a test and a possible break and close above 1.9043 could be seen the days and weeks ahead
Support Comments 1.9016/00 Psychologicallevel/broken trendline/.782 Ret 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
Resistance Comments 1.9088/1.9143 Aug’06 highs 1.9218 April'06 1.9327 Mar’05 high 1.9552 Dec’04 high
Mohammed Isah Independent Analyst Exclusively for Spencer Financial LLC misah@spencerfx.com
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