EURUSD-EUR traded in a tight range yesterday testing a low of 1.3052 before closing at 1.3108 following a bounce off its MT rising trendline.The pair was seen pushing to the upside in early morning trading today. If it can hold on to these intra-day gains and close above its April’05 high/Dec 11’06 at 1.3126/30 then a run at its Nov 28’06 high/.786 Ret at 1.3219/31 could be seen. This zone, which is a trigger for further upside gains, must be decisively taken out to pave the way for further upside attacks on its 20 months high at 1.3365 where a break if seen targets its range breakout price objective at 1.3405 followed by its April’05 high at 1.3482 and its Dec’04 high at 1.3667.The daily RSI has turned higher supporting this recovery effort but its weekly counterpart remains negative suggesting that downside pressure is not yet over. On the other hand, a failure to close above these levels (1.3130/1.3231) call for the continuation of its short term downtrend targeting initially 1.3130,its Dec 11’06 low with a loss of here triggering a move towards a retest of its Dec18’06 low/MT rising tendline.Below here lies its Jun’06 high/psychological level at 1.3000/1.2981 ahead of its Nov 10’06 high/Aug’06 high at 1.2901/39 and its Nov 17’06 low at 1.2761.EUR’s trend remains to the upside in the long-term but must hold above 1.3000/1.2981 levels to preserve that view.
Support Comments 1.3130/1.3086 April’05 high/Dec 08’06/Nov 27’06 lows 1.3059 MT rising trendline 1.3000/1.2981 Psycho level/Jun’06 high 1.2901/39 Nov 10’06 high/Aug’06 high
Resistance Comments 1.3219/31 Nov 28’06 high/.786 Ret(1.3667-1.1640) 1.3365 Dec’06 high 1.3405 Broader range breakout price target 1.3482 April’05 high
GBP Tests 1.9429 Level
GBPUSD-GBP traded lower yesterday breaking below its Friday low to set a three-week low at 1.9429.This suggests further downside pressure in the days ahead. It however in early morning trading today pushed higher above 1.9552 level, which might also imply that a daily close above here could set it up for upside gains targeting its Dec 13’06 high at 1.9727.A penetration of this level is required to signal that a test of its 14 years high set in early Dec’06 at 1.9848 could be seen. Above here, the next technical barrier is its psychological level at 2.000.Its longer term charts remain in support of this view. Conversely, immediate downside support comes in at its Dec’04 high at 1.9552 with scope for downside extension targeting its Dec 08’06 low/.382 Ret/Nov 29’06 low at 1.9465/34 followed by its Mar’06 high/Nov 27’06 low at 1.9327/06.Clearance of these levels puts the next support at its April’05/Nov 10’06 highs at 1.9218/1.9177.This level remains key to the continuation of its longer term uptrend. Overall, the pair remains under pressure as long as it holds below 1.9727.
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 2.0045/2.0110 1991/1992 highs
Mohammed Isah Independent Analyst Exclusively for Spencer Financial LLC misah@spencerfx.com
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