Weekly Report 27/12 -31/ 12/ 2010

The previous captured rising wedge pattern of the four hour interval-we recommend reviewing the previous report- has sent the pair successfully to the downside during the previous week. Now, we see how the pair closed negatively below 61.8% Fibonacci of the rally from 105.40 to 115.70, accompanied by bearish candlestick formations. Thus, areas of 76.4% Fibonacci are under microscope now, while a break of which will ease the path towards 106.15, followed by 105.40 once more. Vortex shows the strength of the bearish trend, while SMA 50 acts as a ceiling for the time being. Therefore, more downside actions are awaited during this week, particularly if 107.80 zones are breached.

The trading range for this week is among key support at 105.40 and key resistance now at 111.60.

The general trend over short term basis is to the downside, targeting 97.90 as far as areas of 132.50 remain intact.

Previous Report

RecommendationBased on the charts and explanations above our opinion is, selling the pair around 109.05 targeting 106.15 and stop loss above 111.10 might be appropriate.