EURUSD-EUR closed higher on Wednesday reversing almost all its Tuesday gains and breaking back above its Sept 22’06 high and .786 Ret of its Aug-Oct decline at 1.2830/39.The pair was seen making a fresh run on the upside in early morning trading today suggesting that 1.2886/1.2901 levels, representing its falling trendline drawn off Aug’06 high/Nov’06 high are seen as its next target. This new development is constructive in the short term but the aforementioned levels must give way to extend price gains towards its year-to-date high/psychological resistance at 1.2981/1.3000.If this zone succumbs to upside pressures which this zone has survived in the past, its April’05 high at 1.3126 and its Mar’05 high at 1.3482 should come into play ahead of a strong resistance at 1.3667,its Dec’04 high. With positive daily studies and a pattern of higher highs and higher lows in place on the daily scale,EUR may see high level gains in the days ahead. On the downside, its Sept 22’06 high and .786 Ret of its Aug-Oct decline at 1.2830/39 is the immediate target followed by 1.2690/79 levels, its Nov 03 & 06 lows with a break triggering a move towards its Sept’06 lows at 1.2641/29 zone ahead of key support at 1.2488/59, its Oct’06/July’06 lows. On the whole,EUR’s new challenge on the upside is constructive but as long as 1.2886/1.2901 zone remains intact, a break of its pattern of higher highs and higher lows is envisaged
Support Comments 1.2830/39 Sept 22’06 high/.786 Ret 1.2774/47 Oct 03’06 high/Nov 08,15,17 lows/.618 Ret 1.2690/79 Nov 03 & 06 lows 1.2629/69 Sept’06 lows/Oct 02/04’06 lows
Resistance Comments 1.2886/1.2901 LT falling trendline/.786 Ret/Nov’06 high 1.2981 Year-to-date high 1.3126 April’05 high 1.3482 Mar’05 high
GBP Continues To Recover
GBPUSD-GBP continues to recover on the heels of its recent decline to a low of 1.8834 last week.It closed higher(1.8999) yesterday and shot to the upside in early morning trading today indicating that an attack on the 1.9067/1.9101 levels, its falling trendline from Dec’04 and .786 Ret of its recent decline look likely. If a violation of this zone materializes, its Aug’06 and Nov’06 highs are exposed with a break and close above these levels needed to resume its primary uptrend. If this is seen, its April’05 high at 1.9218 and its Mar’05 at 1.9327 are the next technical levels. A push beyond these levels should target its Dec’04 high at 1.9552.In addition, its daily studies remain positive supporting the above view. On the other hand, a failure ahead of 1.9067/1.9101 levels should trigger losses towards 1.8976/48 levels, its Nov’6 & 9’06 lows followed by 1.8858/34, its Oct 20’06 high/Nov 15 & 17 lows and 1.8777, its 4hrs rectangle price objective. Clearance of this zone could push the pair lower towards its LT rising trendline/Oct 24’06 low at 1.8671/61.Overall,GBP remains vulnerable below 1.9143/77(Aug/Nov highs) which has held several times in the past.
Support Comments 1.8948/76 Nov 6 & 9’06 lows/Nov 17’high 1.8858/34 .618 Ret/Oct 20’06 high/Nov 15&17 lows 1.8777/33 Rectangle pricetarget/Oct 17&18’06 highs 1.8671 Oct 24’06 low/LT rising trendline
Resistance Comments 1.9088/67 Aug 31’06/LT falling 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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