EURUSD-EUR rallied to a high of 1.2901 on Friday clearing 1.2830/39 levels, its Sept 22’06 high/.786 Ret to close the week higher, invalidating spinning top candle formed on the weekly chart the previous week.EUR maintains positive tone while above 1.2830/39 with scope for price extension towards 1.2981/1.3000.If a successful violation of this zone is seen, its April’05 high at 1.3126 should be its next target with a break of this level allowing for further gains towards 1.3482,its Mar’05 high ahead of its Dec’04 high at 1.3667.This scenario remains supported by the weekly studies which are positive and heading higher.However,the inability of the pair to hold onto most of its gains on Friday suggests that further upside gains might be difficult as shooting star candle pattern was formed at the end of Friday trading session. This is a top reversal signal, which needs a follow-through for confirmation. If this happens in the days head EUR should push lower at first towards 1.2830/39,its its Sept 22’06 high/.786 Ret with a break targeting 1.2765/48, its Oct 03’06 high/.618 Ret followed by its of its Nov 03 & Oct 31’06 lows at 1.2679/76.On the whole,EUR retains its short term upside bias as long as the 1.2830/39 zone broken last week holds as support
Support Comments 1.2830/39 Sept 22’06 high/.786 Ret 1.2714/08 50 ema/.50 Ret/Broken falling trendline 1.2629/69 Sept’06 lows/Oct 02/04’06 lows 1.2560 July 26’06 low
Resistance Comments 1.2830/39 Sept 22’06 high/.786 Ret 1.2981 Year-to-date high 1.3126 April’05 high 1.3482 Mar’05 high
GBP Hesitates After Price Extension
GBPUSD-GBP made a run to the upside on Friday breaking above its Aug/Nov’06 highs at 1.9135/43 extending its short-term gains to 1.9177, the highest price gains this year. The pair however gave back part of those gains but still closed higher at end of the week, making it the fourth week of higher closes since its bottom in early Oct’06.With its upside tone still intact as long as 1.9080/50 zone holds, GBP should attempt further gains towards 1.9218, its April’05 high with a break of this level exposing its Mar’05 high at 1.9327 ahead of 1.9552, its Dec’06 high. In addition, the weekly momentum is positive suggesting that upside gains are possible. On the other hand, with GBP unable to maintain a new high on Friday after pushing above 1.9135/43 levels combined with a close below these levels at the end of the session,it should see downside pressures towards 1.9080/62,its late Aug’06 high/long term broken falling trendline/short term rising trendline.Another support is seen at 1.9002/8948 levels, its Oct 27’06 high and Nov 06’06 low. A loss of this zone, if seen could push the pair towards 1.8897/58 levels, its Oct 03 & 20’06 highs ahead of its Oct 24’06 low at 1.8671.Overall,GBP requires a decisive break and close above its new high at 1.9177 to resume its primary uptrend.
Support Comments 1.9080/62 Aug 31’06/LT broken trendline 1.9002/8948 Oct 27’06 high/Nov 06’06 low 1.8897/58 Oct’06 high/.618 Ret/Oct 20’06 high 1.8739/33 Oct 17&18’06 highs
Resistance Comments 1.9143/77 Aug’06/Nov’08 highs 1.9218 April’05 high 1.9327 Mar’05 high 1.9552 Dec’04 high
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