Weekly Report 18/07 -22/ 07/ 2011

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The daily studies offers a potential classical head and shoulders top pattern and when we have a deeper look at provided graph, we will find that there are two more negative classical technical factors that might send the pair to the downside over upcoming sessions as follows:

The breakout below the uptrend line that carried the movements from 1.4225 recorded on May, 20, 2010 to the significant peak of 1.7645.

The resistance offered from SMA 50 and SMA 100.

Henceforth, we classify the bounce from 1.5780 to 1.6200 zones as a retesting action before resuming the downtrend that started at 1.7645. Ultimately, Stochastic is on its way to crossover negatively solidifying our constructive bearish anticipations.

The trading range for this week is among key support at 1.5780 and key resistance at 1.6440.

The general trend over short term basis is to the downsidetargeting 1.4225 as far as areas of 1.6875 areas remain intact.

Previous Report

RecommendationBased on the charts and explanations above our opinion is, selling the pair around 1.6155 targeting 1.5880 and stop loss above 1.6350 might be appropriate.