Weekly Report 07/11 -11/ 11/ 2011

It seems that the market is still forming the right shoulder of our previous explained head and shoulders top pattern over four-hour interval. The consecutive closings below the previous broken correctional trend line that carried the movements from 1.5270 zones suggest that, we are facing a Bulkowski's complex head and shoulders top pattern. This technical concept will not be damaged as far as the top of 1.6165 remains intact, while a break of 1.5945, preferably below 1.5905 will assist the pair to beat the neckline this time. Vortex -trend indicator- may cause some kind of fluctuation, but the bearishness is still favored during this week; noting that a break of the neckline will bring panic sell-off actions towards the technical target seen on the chart.

The trading range for this week is among key support at 1.5555 and key resistance at 1.6440.

The general trend over short term basis is to the downside, targeting 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 below 1.5945 targeting 1.5630 and stop loss above 1.6160 might be appropriate.