Daily Outlook 04.02.2008 by Dimo Dimov

The euro rose initially sharply on Friday to 1.4954 but was sold off heavy thereafter to 1.4785. This looks like a reversal pattern so in my opinion the short term direction is down. We are currently in a corrective recovery after Friday’s losses and further recovery to 1.4855 is likely. However if the direction is down, the recovery should stay below 1.4900. On the other side a rise above 1.4900 will abort the impulsive interpretation of the Friday’s sell-off and will increase the possibility for a re-test of 1.4954.

Trading strategy: 09:27 EST; 14:27 GMT

Short position from 1.4851

Exit the short position at market (1.4817) with profit 34 pips.

Sell again on recovery to 1.4855, stop loss - 1.4900, target - open

Confidence level – medium

This analysis has only informational and educational purpose and does not represent a proposal for buying or selling currency contracts.