EURUSD-EUR traded lower yesterday testing 1.2790/85 levels before closing at 1.2812,the second downside losses since it rejected higher level prices on Friday ahead of its year-to-date high at 1.2981.With the daily studies heading lower and price action losing upside momentum,EUR should push lower initially towards 1.2765/47 zone, its Oct 03’06 high/Nov 08’06 low/.618 Ret with a decisive break lower needed to extend further weakness towards 1.2690/79 levels, its Nov 03 & 06 lows .Further technical support is seen at 1.2641/29 zone, its Sept’06 lows and Oct 19’06 high ahead of its Oct’06 lows at 1.2488/82.On the upside, if EUR closes back above 1.2830/39 levels, its Sept 22’06/.786 Ret, a retest of its Nov’06 high at 1.2901 could be seen with scope for further gains towards its year-to-date high(YTD)/psychological resistance at 1.2981/1.3000.This zone must be cleared to pull the pair out of its six months range in place since June this year. In such a break, 1.3126 level, its April’05 high will now be targeted ahead of 1.3482 level, its Mar’05 high.Overall,EUR remains stuck in a range between 1.2981 on the upside and 1.2459 on the downside with a break either way needed to create a meaningful directional moves.
Support Comments 1.2765/47 Oct 03’06 high/Nov 08’06 low/.618 Ret 1.2690/79 Nov 03 & 06 lows 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 Continues To Weaken
GBPUSD- GBP weakened further yesterday breaking below its short term rising trendline established in Mid-Oct’06 to close at 1.8957,slightly ahead of its Nov 06’06 low at 1.8948.This weakness is coming on the heels of its recent failure above its Aug’06 high at 1.9143 experienced last week. From what the daily chart is telling us, more downside prices could be seen in the days ahead especially now that momentum indicators are positive and heading lower supporting this view. In such a case, the next support level to shoot for comes in at 1.8948, its Nov 06’06 low with a break needed to put in a temporary top. Continued losses could see this pair targeting 1.8897/58 levels, its Oct 03 & 20’06 highs before its Oct 24’06 low at 1.8671.If a loss of this level occurs, its Oct’06 lows at 1.8522/11 should be the next target. On the other hand, holding above 1.8954/48 levels should see GBP pushing towards a retest of its short term (ST) broken trendline/late Aug’06 high at 1.9043/88 which should now reverse roles as resistance and put more pressures on the downside but if it fails, focus would now be shifted to the upside towards 1.9143/77 zone, its early Aug’06 high/Nov’06 high. On a successful breach of these levels, the pair should push for more upside gains towards 1.9218,its April’05 high followed by 1.9327,its Mar’05 high ahead of its Dec’04 high at 1.9552.On the whole,GBP is vulnerable to further downside price losses and must close back above 1.9043/88 zone to reduce downside pressures.
Support Comments 1.8948 Nov 06’06 low 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 1.9088/42 Aug 31’06/ST broken trendline 1.9143/77 Aug’06/Nov’08 highs 1.9218 April’05 high 1.9327 Mar’05 high
Mohammed Isah Independent Analyst Exclusively for Spencer Financial LLC misah@spencerfx.com
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