Weekly Report 18/07 -22/ 07/ 2011

We are facing a suggested harmonic pattern, which could turn into a butterfly harmonic pattern with the first potential reversal zone at 1.3765 and Stochastic provided a negative signal showing the possibility of reaching this point indeed. This pattern remains strong as long as the pair is trading below 1.4150-70, where trading above this level will weaken the pattern. Therefore, we expect a downside trend to control the pair's movement for this week, and requires consolidating below the mentioned levels.

The trading range for this week is among the major support at 1.3765 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 around 1.4150 targeting 1.3910 and stop loss above 1.4280 might be appropriate this week