Update for: 2010-08-16 - 2010-08-22

Posted on: Sunday, 15 August 2010 13:37

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EURUSD: 1.2753

 Short-Term Trend:  sideways

Outlook: Two very important things have happened with the last week's steep sell-off in EURUSD: 1st, the trend on the daily chart is no longer considered to be on the upside - instead we now think EURUSD is in a large sideways consolidation between roughly 1.19 and 1.32. And 2nd, the last week's decline re-inforces the wave structure presented on the chart.
The daily oscillators are now moving sharply down from previous overbought levels and these are considered to be reliable sell signals. Thus, we expect now a decline twd 1.2347 and then to 1.2145 in the next several weeks. Only, an unexpected move back abv 1.3196 negates this outlook and argues for gains twd 1.3520. With all this in mind, we favor a short position if a small counter-trend rally develops this week.

Strategy: Shorts favorable at 1.3000. Stop=1.3200. Target=1.2400.

Next Update: Wed, 08/18/2010, 09:00 - 10:00 CET


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