EURUSD-Following a five-month high on Wednesday, EUR pushed to a high of 1.2975 yesterday before closing at 1.2947 forming a spinning top candle at the end of the day. It was seen heading towards yesterday’s high in early trading this morning. This suggests that upside gains and possibly a break and close above 1.2981/1.3000 levels could be seen in the days ahead. A sustained breach of these levels could see the pair pushing towards its April’05 high at 1.3126 followed by its Mar’05 high at 1.3482 with a loss of this level targeting its Dec’04 high at 1.3667.The weekly studies remain bullish supporting this view.Conversely,with the aforementioned candle formation and an overbought condition both on the daily and 240mins charts as the pair approaches 1.2981/1.3000 zone, prices might stall and head lower to correct this condition pushing EUR towards its broken resistance levels at 1.2939/01 zone (Aug’06/Nov 10’06 highs). If these levels give way, pressure on the downside could push the price towards its LT falling trendline/Sept 22’06 high at 1.2880/30.Further weakness below this zone would put a halt to its upside tone and set the stage for lower level prices targeting 1.2690/79 levels, its Nov 03 & 06 lows before its Sept’06 lows at 1.2641/29.On the whole,EUR’s upside tone remains intact as long as 1.2901/1.2830 holds.
Support Comments 1.2901/1.2886 Nov 10’06 high/Broken LT falling trendline 1.2830/39 Sept 22’06 high/.786 Ret 1.2774/47 Oct 03’06 high/Nov 08,15,17 lows/.618 Re 1.2690/79 Nov 03 & 06 lows
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 Maintains Gains
GBPUSD-GBP could be heading to a fifth-day of daily price gains following its bounce off 1.8834/37 lows last week if it maintains a high at 1.9190 seen in early trading this morning. This development put more pressures on the upside with a decisive break above 1.9177 level needed to push the pair towards 1.9218,its April’05 high. A close above this level would pave the way for gains targeting 1.9327,its Mar’05 high. On a break and close above this level, its Dec’04 high at 1.9552 comes into focus. The weekly RSI remains in support of this view. On the other hand, with overbought setting in on the daily as well as the 60mins and the 240mins charts, weakness may follow targeting its Sept 25’06 high/LT falling trendline from Dec’04 at 1.9073/1.9067.If further weakness is seen, the pair should push lower towards, its Nov’6 & 9’06 lows at 1.8976/48 followed by 1.8858/34, its Oct 20’06 high/Nov 15 & 17 lows ahead of 1.8671,its Oct 24’06 low. Overall, GBP looks set to break above its YTD high at 1.9177.
Support Comments 1.9073/67 Aug 31 & Sept 25 highs/LT trendline 1.8948/76 Nov 6 & 9’06 lows/Nov 17’high 1.8858/34 Oct 20’06 high/Nov 15&17 lows 1.8777/33 Rectangle pricetarget/Oct 17&18’06 highs
Resistance Comments 1.9177 Nov’08 high 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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