Weekly Report 10/10 -14/ 10/ 2011

The sharp pullback form the pivotal support level of 1.5270 -check the importance of this level in the previous report- succeeded in activating a positive crossover on Stochastic as seen on the provided weekly chart. Actually, the weekly closing below the neckline of the suggested double top pattern in addition to the harmonic probability of drawing the CD leg of the duplicated harmonic pattern prevents us from suggesting bullish direction during this week. In the interim, the B point at 1.5780 may be retested to unload the positivity of Stochastic before resuming the bearishness that started at 1.6615. Thereby, we should be patient to make sure that the bearishness will continue and that will not be confirmed unless 1.5555-1.5540 zones are breached decisively.

The trading range for this week is among key support at 1.5255 and key resistance at 1.6075.

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 with a breakout below 1.5540 targeting 1.5270 and stop loss above 1.5780 might be appropriate.