EURUSD-EUR rallied to a high of 1.2848 on Thursday clearing 1.2830 level, its Sept 22’06 high and pushing above its .786 Ret of its Aug-Oct decline in early morning trading today. This development has now set a stage for further upside price gains initially towards stronger resistance at 1.2981/1.3000,its year-to-date high and psychological resistance with a decisive break and close above this zone required to open the door for attacks on the 1.3126 level, its April’06 high ahead of another key resistance coming in at 1.3482, Mar’05 high. In addition, the weekly studies are positive and trending higher suggesting that further upside gains are possible.On the other hand, any weakness seen on this new break to the upside should now be contained 1.2839/00(Sept 22’06/.786 Ret/psycho level) zone which should now reverse roles as support and preserve the break above the mentioned levels. On a continued weakness focus will now be shifted to the 1.2748/51 levels, its Nov 09 & 08’06 lows and Oct 27’06 high with a loss targeting 12679/76, its Oct 31’06/Nov 03’06 lows/short term range bottom ahead of a key support zone at 1.2641/29.On the whole, with a break above its Sept 22’06 high EUR should now push towards its year-to-date high and its psychological resistance at 1.2981/1.3000 and possibly higher.
Support Comments 1.2830/39 Sept 22’06 high/.786 Ret 1.2709/10 100 ema/.618 Ret 1.2629/69 Sept’06 lows/Oct 02/04’06 lows 1.2560 July 26’06 low
Resistance Comments 1.2981/1.3000 Year-to-date high/Psycho level 1.3126 April’05 high 1.3482 Mar’05 high 1.3667 Dec’04 high
GBP Struggles Ahead Of 1.9135/43 Levels
GBPUSD-GBP closed higher (1.9066) yesterday, failing to push above 1.9100/43 levels for the sixth consecutive day since the beginning of Nov’06.It is now struggling ahead of these levels.With momentum waning combined with its past failures at this zone, a break of these levels might be tough for this pair but if seen, 1.9218, its April’05 high should serve as the next ceiling.If this level gives way, its Mar’05 high at 1.9327 comes into play with a break paving the way for a retest of its Dec’04 high at 1.9552.The weekly studies remain supportive of this view. If failures at this zone continue to be seen, the pair risks immediate downside price losses towards 1.9002/1.8948,its broken short-term falling trendline/Oct 27’06 high and Nov 06’06 low. A clearance of this level should push the pair towards 1.8897/58 levels, its Oct 03 & 20’06 highs ahead of its Oct 24’06 low at 1.8671 with another strong support seen at 1.8522/11,its Oct’06 lows.Overall,GBP has its year-to-date high at 1.9143 to contend with, with a sustained break and close above these levels needed to resume its primary uptrend.
Support Comments 1.9000/06 Psycho level/broken trendline/.782 Ret 1.8897/58 Oct’06 high/.618 Ret/Oct 20’06 high 1.8739/33 Oct 17&18’06 highs 1.8671 Oct 24’06 low
Resistance Comments 1.9088/1.9143 Aug’06 & Nov’06 highs/LT trendline 1.9218 April’05 high 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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