Weekly Report 24/01 -28/ 01/ 2011

The royal pair respected the previous discussed bullish harmonic pattern -click of the previous report for more details-via inclining from 0.8325 zones to the current levels. Now, another harmonic formation started to appear on the same time frame, but this time it might be a bearish Gartley pattern, with an ideal 61.8% retracement of XA leg. Thus, the pattern might be completed at 0.8560-0.8570 zones, where a potential downside move is expected to occur during this week. RSI 14 is valued at 70, interpreting overbought case.

The trading range for this week is among the key support at 0.8325 and key resistance now at 0.8760.

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, selling the pair around 0.8550 targeting 0.8425 and stop loss above 0.8630 might be appropriate.