Weekly Report 24/10 -28/ 10/ 2011

The pair was able to consolidate again above 127.2% Fibonacci extension of the CD leg of the bullish Crab harmonic pattern. Stability above this level at 1.3825 suggests a test of 161.8% Fibonacci extension of the same leg at 1.4010. The level of 1.4010 also represents 61.8% Fibonacci correction of the downside movement, which started from the top at 1.4550, but we expect the upside move to extend towards this level; however, we recommend reviewing our next reports, awaiting the pair's behavior around this critical level. Failure to settle above 1.3825 weakens the extension of the upside move.

The trading range for this week is among the major support at 1.3515 and the major resistance at 1.4105.

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 buying the pair above 1.3825, and take profit in stages at (1.3910 and 1.4010) and stop loss with 4-hour closing below 1.3710 might be appropriate.