Weekly Report (May 16-20, 2011)

The pair moved to the downside to break through the critical 1.4150 support, the neckline for the bearish pattern shown above which resides with the 38.2% Fibonacci correction. The breach with a daily closing below it will extend the downside correctional move for the week targeting next 1.3910 which if breached moved the pair to the next correctional level at 1.3665. We will adopt the first target and observe the pair when reaching the target to confirm the next move.

The trading range for this week is among the major support at 1.3790 and the major resistance at 1.4395.

The short term trend is to the upside with steady daily closing above 1.2795 targeting 1.5135.

Previous Report

RecommendationBased on the charts and explanations above we recommend selling the pair around 1.4150 targeting 1.3910 and stop loss above 1.4250 might be appropriate this week