Weekly Report 20/12 -24/ 12/ 2010

The pivotal resistance of 0.8550 is still representing a technical obstacle as the pair retraced from it twice as seen on the provided four hour chart. This chart offers a harmonic possibility of forming a harmonic butterfly pattern, where we believe that the CD leg is in progress, since SMA 50 is still carrying the bullishness from below. At the same time, Stochastic is approaching the oversold areas gradually and thus, we still see chances for achieving additional bullishness during this week for the suggested CD leg rally that started at 0.8345 zones. On the other hand areas of 0.8340 should hold, otherwise we will reconsider the harmonic sequence.

The trading range for this week is among the key support at 0.0.8295 and key resistance now at 0.8700.

The general trend over short term basis is to the downside, targeting 0.7780 as far as areas of 0.8965 remain intact.

Previous Report

RecommendationBased on the charts and explanations above our opinion is, buying the pair around 0.8560 targeting 0.8700 and stop loss below 0.8570 might be appropriate.