EURUSD-EUR traded lower Wednesday reversing its Tuesday gains to close at 3216.The price action has produced a bearish engulfing candle pattern (a top reversal signal) suggesting that more downside pressure should be seen. With EUR unable to maintain upside momentum off its Dec 11’06 low at 1.3130, the next likely technical support comes in at its April’05 high/Nov 27’06/Dec 11’06 high low at 1.3130/1.3086 with a break extending downside pressure towards its Jun’06 high/psychological level at 1.3000/1.2981 where a test and a likely hold above this zone is expected to allow for higher level prices. If however, this zone succumbs, the recent resumption of its longer-term uptrend would be put on hold. Daily studies are supportive of the pair’s downside pressure. On the upside, its 20 months high at 1.3365 must be cleared to turn pressure to the upside thereby targeting its range breakout price objective at 1.3405.A decisive violation of this level will set the stage for upside gains targeting its April’05 high at 1.3482 ahead of its Dec’04 high at 1.3667.On the whole, EUR must maintain above 1.3000/1.2981 levels to keep its longer term upside campaign alive.
Support Comments 1.3219/31 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 Fails Ahead Of 1.9726 Level
GBPUSD-GBP failed ahead of its Dec 08’06 high at 1.9726 yesterday hitting a low of 1.9602 before closing at 1.9673.This hesitation suggests that its upside momentum build up off 1.9465 low may be unsustainable switching near term pressure to the downside and aiming initially at its Dec’04 high at 1.9552 and its Dec 08’06 low/.382 Ret/Nov 29’06 low at 1.9465/34.If a clearance of these levels are seen, a push lower towards its Mar’06 high/Nov 27’06 low at 1.9327/06 should follow. Below here lie its April’05/Nov 10’06 highs at 1.9218/1.9177. Its daily RSI remains in support of this view. On the upside, immediate technical resistance remains at its Dec 08’06 high at 1.9726 where a break will target its 14 year high at 1.9848 followed by its psychological resistance at 2.000 before its 1991/1992 highs at 2.0045/2.0110.On the whole, GBP’s failure ahead of 1.9726 may push it lower but as long as that pressure is contained by the 1.9177 level, its primary trend remains to the upside.
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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