Weekly Report 01/08 -05/ 08/ 2011

The pair rebounded sharply to the upside after approaching 1.4215, but stable below 23.6% Fibonacci correction of the bearish bat harmonic pattern's CD leg at 1.4415. We also see Stochastic is within overbought areas; in addition, the pair breached the harmonic support line at 1.4445 and consolidated below it. In the meanwhile, stability above the first target of the harmonic pattern at 38.2% Fibonacci correction of the CD leg at 1.4335 reduces the effects of the harmonic pattern, while the RSI is stable above the 50 points level. Therefore, we stay neutral, unless a 4-hour closing below 1.4335 confirms the suggested downside trend.

The trading range for this week is among the major support at 1.4040 and the major resistance at 1.4620

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 4-hour closing below 1.4335 targeting 1.4215 and stop above 1.4415 might be appropriate