Weekly Report 21/03 -25/ 03/ 2011
Due to the overbought sign of RSI 14, a pulling back action towards the lower line of the under preparation minor upside channel is awaited before resuming the bullish scenario. Our bullish scenario is still stuck to the harmonic 5-0 pattern, which we followed wave after wave during the previous three weeks. This pattern proved its efficiency, pushing the pair upwards whereas it stabilized above 161.8% Fibonacci projection of CD leg as seen on the provided four hour graph. Thereby, we will look at the upside, targeting 261.8% Fibonacci of CD leg at 0.8815 and a break of which will rekindling buying pressure towards 0.8965. Areas of 0.8965 are very sensitive and if the royal pair succeeded in reaching them, the red alert of the trend over short and medium term basis will be lightened. My dear reader, let us wait and see.
The trading range for this week is among the key support at 0.8520 and key resistance now at 0.8965.
The general trend over short term basis is to the downside, targeting 0.7780 as far as areas of 0.8965 remain intact.
Support0.87000.86650.86050.85450.8520Resistance0.87800.88150.88600.89100.8965RecommendationBased on the charts and explanations above our opinion is, buying the pair around 0.8690 targeting 0.8815 and stop loss below 0.8605 might be appropriate.