Weekly Report 01/08 -05/ 08/ 2011
The pair failed to complete the potential head and shoulders top formation on past Friday and it was suitable that we suggested a start for selling pressures below 1.6250 as the pair couldn't maintain levels below it, then began inclining. Now, we can see a negative divergence on RSI 14 after touching 88.6% Fibonacci retracement of CD leg for the bullish harmonic AB=CD pattern appearing on the main chart. This divergence may send it below 1.6365-76.4%- again, limiting the technical targets below 100% and 127.2% of the aforementioned leg. When we look deeper at the secondary graph of the daily basis, we will notice how the pair is presently moving within very sensitive areas as it tests the previous broken uptrend line from 1.4225 to the peak of 1.6745. To recap,only a break of 1.6365 will assist bears to dominate the market; whilst breaching through 1.6545 will give the leadership to the bulls.
The trading range for this week is among key support at 1.5780 and key resistance at 1.6745.
The general trend over short term basis is to the downside, targeting 1.4225 as far as areas of 1.6875 areas remain intact.
|Recommendation||Based on the charts and explanations above our opinion is, staying aside until an actionable setup presents itself over coming sessions.|