Weekly Report 3 - 7 / January / 2011

The pair found strong resistance around the previously broken 38.2% Fibonacci correction that has turned into resistance at 1.3365; therefore, trading remains wedged between 38.2% and 50% Fibonacci till now. The breach of the descending channel's resistance level that organizes trading from levels around 1.4280, alongside building a base above SMA 50 in addition to Stochastic nearing oversold areas are all factors that make us expect a bullish overall direction this week, where it requires two essential factors to be resumed; first, a clear breach of 1.3365 and the second is a daily closing above 1.3120. Technical targets start at 1.3500 then 1.3665.

The trading range for this week is among the key support at 1.3120 and the key resistance at 1.3665

The short term trend is to the upside as far as 1.2795 remains intact with targets at 1.5135.

Previous Report

RecommendationBased on the charts and explanations above our opinion is buying the pair around 1.3240 targeting 1.3500 and stop loss below 1.3120, might be appropriate.