EURUSD-Following its one-week corrective downside pressure pushing it to a low of 1.3179 on Friday, EUR saw further intraday weakness towards 1.3130 on Monday but reversed the losses and closed higher at the end of the day pushing back above 1.3231 level. This suggests that a retest of its 20 months high at 1.3365 could be seen but it must follow through to the upside to day (closing basis) to convince the market that such retest is likely. If a break and close above this level occurs then the next target comes in at 1.3405, its broader range price target with scope for price extension towards 1.3482, its April’05 high ahead of its Dec’04 high at 1.3667.On the other hand, a failure to maintain above 1.3231 puts the immediate downside target at its April’05 high/Nov 27’06/Dec 11’06 high low at 1.3130/1.3086 before its Jun’06 high/psychological level at 1.3000/1.2981.If EUR could hold above this zone when tested, a recovery targeting 1.3365/1.3667 should follow. Current downside pressure remains supported by its daily studies suggesting that weakness is not yet over. On the whole, a sustained closed above 1.3365 level is required to put EUR on the path to challenge its Dec’04 high at 1.3667.
Support Comments 1.3219/19 Nov 28’06 high/.786 Ret(1.3667-1.1640) 1.3126/1.3086 April’05 high/Nov 27’06 low 1.3000/1.2981 psycho level/Jun’06 high 1.2901/39 Nov 10’06 high/Aug’06 high
Resistance Comments 1.3365 Dec’06 high 1.3405 Broader range breakout price target 1.3482 Mar’05 high 1.3667 Dec’04 high
GBP Closes Back Above 1.9552 Levels
GBPUSD-GBP rallied off 1.9465 low yesterday breaking back above 1.9552, its Dec’04 high earlier eroded last week. Although this run to the upside improves the odds of higher level prices targeting initially 1.9726,its Dec 08’06 high, the underlying indicator at the bottom of the chart is negative and points lower implying that further downside weakness could still be seen. If however 1.9726 level is successfully breached, its 14 months high at 1.9848 comes into play with a break setting the stage for a run at 2.000, its psychological resistance ahead of its 1991/1992 highs at 2.0045/2.0110.Long term charts support this upside view.Conversely,a close below 1.9552 shifts the focus back to its Dec 11’06 low/.382 Ret/Nov 29’06 low at 1.9465/34 where a penetration if seen targets its Mar’06 high/Nov 27’06 low at 1.9327/06.Below here lies a solid support at its April’05/Nov 10’06 highs at 1.9218/1.9177.This zone is expected to contain further downside incursions if seen. All in all, GBP’s primary uptrend remains intact as long as this level(1.9177) remains unbroken.
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 10’06 high
Resistance Comments 1.9726 Dec 08’06 1.9848 Dec 01’06 high 2.000 Psychological Resistance 2.0045/2.0100 1991/92 highs
Mohammed Isah Independent Analyst Exclusively for Spencer Financial LLC misah@spencerfx.com
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