EURUSD-EUR is now consolidating following its recent run to the upside testing a high of 1.3365.It opened the week on the negative side trading to as low as 1.3282 yesterday. Although the pair’s long-term uptrend remains positive, with overbought signals flashing on the daily chart, it should push lower to ease this condition. The first target to aim at in such a situation comes in at 1.3231/15, its .786 Ret/Nov 28&28’06 highs ahead of 1.3126/1.3086 levels, its April’05 high/Nov 27’06 low where a failure will set the stage for further losses towards a key support zone at 1.3000/1.2981,its Jun’06 high/psychological level. As long as these levels hold, the pair’s longer term upside tone remains intact but if a break lower is seen, its recent break out of a six-month trading range will be invalidated and downside pressure would follow. There is no evidence that this could happen now. On the upside, immediate resistance is seen at 1.3405,its range breakout price target with a break increasing the risk for a move towards its March’06 high at 1.3482 followed by its Dec’04 high at 1.3667. On the whole,EUR’s upside outlook remains constructive as the current consolidation should provide more energy for it to run at 1.3405/82 levels and possibly higher.
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’s Upside Remains Positive But Overbought
GBPUSD-Overbought condition remains a factor in GBP but the pair still maintains its positive upside outlook. With its recent run to the upside coupled with weakening momentum indicators on the daily chart, it may need to consolidate or correct lower before pushing for further upside gains. Such corrections/pullback should see the pair targeting its Dec 01’06 at 1.9635 with a clearance needed to pave the way for a move towards its Dec’04 high/horizontal support at 1.9552.This level should now reverse roles as support and send the pair high but if a break occurs, then its .382 Ret (1.8834-1.9848 rally)/Nov 29’06 at 1.9455/31 would be the next target with a loss of this zone triggering losses towards its April’06 high/Nov 27’06 low at 1.9327/06 and ultimately towards its Nov’06 high at 1.9177.However,the pair is expected to resume its upside move after consolidation/pullback targeting initially 1.9848 level, its Dec 01’06 high followed by 2.000 level, its psychological resistance with scope for further gains towards 2.0045/2.0110,its 1991/1992 highs. Its weekly and monthly charts remain supportive of this view. All in all, GBP maintains its upside tone and should push for higher-level prices after unwinding the overbought condition.
Support Comments 1.9635 Dec 01’06 low 1.9552 Dec’04 high 1.9327/06 Mar’05 high/Nov 27’06 low 1.9218 April’05 high
Resistance Comments 1.9848 Dec 01’06 high 2.000 Psychological Resistance 2.0045/2.0100 1991/92 highs 2.1447 .786 Ret(2.4519-1.0841)
Mohammed Isah Independent Analyst Exclusively for Spencer Financial LLC misah@spencerfx.com
The information has been prepared for information purposes only. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. This information contained herein is derived from sources we believe to be reliable, but of which we have not independently verified. Spencer Financial LLC assumes no responsibilities for errors, inaccuracies or omissions in these materials, nor it shall be liable for damages arising out of any person's reliance upon this information. Spencer Financial LLC does not warrant the accuracy or completeness of the information, text, graphics, links or other items contained within these materials. Spencer Financial LLC shall not be liable for any indirect, incidental, or consequential damages including without limitation losses, lost revenues or lost profits that may result from these materials. Opinions and estimates constitute our judgment and are subject to change without notice. Past performance is not indicative of future results
Disclaimer: All information on this web site is subject to change. The use of this web site constitutes acceptance
of our user agreement. All publisher financial articles at
FXtree.com are those of the individual authors and do not represent trading recommendations
of FXtree.com or its staff.
