Weekly Report 05/12 -09/ 12/ 2011

Friday's violent decline has proved the pair's bearish tendency where the pair was taken once more towards 23.6% Fibonacci retracement of the entire downside rally from 1.6615 to the significant low of 1.5270 as seen on the provided daily chart. Furthermore, we added SMA 20 to the major SMA 50-check the previous report- where we notice that the movements that created the upper shadows of the previous three candlesticks should be classified as retesting actions for SMA 20. Ultimately, we suggest potential downside resumption during this week, supported by the negativity appearing on Stochastic. The pivotal support resides at 1.5420 and a break of which will accelerate declines.

The trading range for this week is among key support at 1.5180 and key resistance at 1.5935.

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 1.5630 targeting 1.5335 and stop loss above 1.5780 might be appropriate.