Weekly Report (May 23-27, 2011)

The SMA 50 held the pair from moving to the upside last week, pressuring the pair to the downside below the critical support at 1.4150. Trading below the mentioned level activated the suggested scenario in our previous weekly report, supported by the downside signal on Stochastic. Therefore, we expect further downside correction this week targeting 1.3910, a breach of which will extend the downside move towards 1.3665. We should observe the pair when reaching the target correction levels, as the current downside move is within the bearish correctional structure for the entire upside move shown above.

The trading range for this week is among the major support at 1.3665 and the major resistance at 1.4455.

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 with around 1.4150 targeting 1.3910 and stop loss above 1.4295 might be appropriate this week