Weekly Report 08/08 -12/ 08/ 2011

According to the previously suggested pattern, the pair inclined affected by the bullish AB=CD pattern to trade now above the C point top of the pattern, which suggest a retest of 127.2% Fibonacci correction of the CD leg of the harmonic pattern at 0.9880. Stability above this level could create a bullish wave that may force the pair to retest 161.8% of the CD leg at 1.0010. But, momentum indicators are turning into oversold areas, which could lead heavy fluctuations and maybe downside corrections before the extension of the upside wave. Our expectations remain valid as long as the pair is stable above 0.9635 in general, and above 0.9780 on intraday basis.

The trading range for this week is among the major support at 0.9550 and the major resistance at 1.0125.

The short-term trend is to the downside as far as 1.0665 remains intact targeting 0.9000.

Previous Report

Support0.97800.97350.97000.96350.9590
Resistance0.98450.98800.99100.99701.0010
RecommendationBased on the charts and explanations above our opinion is buying the pair around 0.9780 and take profit in stages at (0.9880, 0.9970 and 1.0010) and stop loss with 4-hor closing below 0.9700 might be appropriate.