EURUSD-EUR rallied to a new high at 1.3481 Thursday clearing its Nov 28’06 high at 1.3219 and .786 Ret at 1.3229 (1.3667-1.1640 decline) .This is the highest price seen in this pair since Mar 20’05 and the second monthly higher close since it rose off its 1.2482/88 lows in Oct’06.With the clearance of the aforementioned levels,EUR now focuses on its 1.3405 level, its broader range breakout price target ahead of its Mar’05 high at 3482.If the violation of this level occurs, its Dec’04 high at 1.3667 comes into play. In addition, the longer-term momentum indicators are positive and pushing higher suggesting that further upside gains are expected. However, having seen an almost two weeks of higher price gains, EUR is heavily overbought and may reverse or consolidate to unwind this condition ahead of further higher gains. The first target on the downside on such weakness comes in at its Nov 28’06 high at 1.3219 and .786 Ret at 1.3229 (1.3667-1.1640 decline) followed by its April’05 high at 1.3126 with a break targeting its Nov 27’06 low at 1.3086.A loss of this level is needed to reduce pressure on the upside and trigger further losses towards its Jun’06 high/psychological level at 1.3000/1.2981.This zone must hold as support in order to preserve EUR’s long term uptrend with a failure invalidating its recent break above its six month broader range . On the whole, EUR bulls remain in charge and are poised to push for higher prices in the days and weeks ahead
. Support Comments 1.3219/29 Nov 28’06 high/.786 Ret(1.3667-1.1640) 1.3126 April’05 high/Nov 27’06 low 1.2981/1.3000 Year-to-date high/psycho level 1.2901/39 Nov 10’06 high/Aug’06 high
Resistance Comments 1.3405 Broader range breakout price target 1.3482 Mar’05 high 1.3667 Dec’04 high 1.4000 Psychological Resistance
GBP Focuses On Higher Level Prices
GBPUSD-GBPUSD extended its recent gains yesterday breaking decisively above its Dec’04 high at 1.9552 and hitting a new high at 1.9699, its highest price since Sept’02 and second monthly gains. With 14% year-to-date gain, this pair has its eyes on further upside gains and it is now targeting 2.000, its psychological resistance ahead of 2.0045/2.0100,its 1991/1992 highs.Additionally,longer term studies remain positive supporting its upside view. Although its uptrend remains intact, GBP has not undergone any meaningful correction but with a bearish diverging hourly chart and overbought condition on the daily chart, this pair should undergo corrections/pullbacks to ease this condition before pushing to the upside. In such a case, downside targets are seen at Dec’04 high at 1.9552 and its April’05 high/Nov 27’06 low at 1.9327/06 followed by stronger support at 1.9218/1.9177,its Mar’05/Nov’06 highs.Overall, GBP has broken and closed above a strong technical resistance level in place since Dec’04 and that level should now revert to support and push the pair higher towards 2.000 level
Support Comments 1.9552 Dec’04 high 1.9327/06 Mar’05 high/Nov 27’06 low 1.9218 April’05 high 1.9177 Nov 08’06 high
Mohammed Isah Independent Analyst Exclusively for Spencer Financial LLC misah@spencerfx.com
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