EURUSD-EUR maintained its recent corrective downside pressure yesterday pushing to as low as 1.3253 and holding above its .786 Ret of its 1.3667-1.1640 decline. Although the pair remains overbought, its upside outlook remains constructive with a push for a retest of its Nov’06 high at 1.3365 expected as long as 1.3231/15, its .786 Ret/Nov 28&28’06 holds downside losses. In such a situation, a sustained break above 1.3365 level will target 1.3405, its broader range breakout price objective with a loss of this level shifting focus to 1.3482, its Mar’05 high enroute to 1.3667,its Dec’04 high. Its longer-term studies remain supportive of this view, as they are positive and heading higher. Downside technical support is seen at 1.3126/1.3086 levels, its April’05 high/Nov 27’06 low if 1.3231/15 zone is violated. Beyond here, another key support lies at 1.3000/1.2981,its Jun’06 high/psychological level. This level remains important to the preservation of EUR’s recent breakout of its six months trading range. On the whole, EUR looks to retest its recent high and possibly higher 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 Extends Its Downside Corrective Losses (Near Term
GBPUSD-GBP sold off yesterday putting in a third day of successive downside losses following its recent high at 1.9848.The decline however halted at 1.9616 ahead of its Dec’04 high at 1.9552.This level is expected to hold and put further pressure on the upside towards retesting its Nov’06 high (1.9848) set late last week with a break and close above here required to extend higher level gains aiming at its psychological resistance level at 2.000 ahead of 2.0045/2.0110,its 1991/1992 highs. On the downside, 1.9635 level, its Dec 01’06 low comes in as the immediate support where a break will set the stage for a decline towards its Dec’04 high/horizontal support at 1.9552.A successful clearance of this area if seen, would open the door for more losses targeting its Nov 29’06 low at 1.9434 before its Mar’06 high/Nov 27’06 low at 1.9327/06 followed by its April’05/Nov 10’06 highs at 1.9218/1.9177. On the whole,GBP’s medium and longer term trends are up with a test of its psychological resistance at 2.000 expected following its current corrective downside pressure.
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
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