Weekly Report 12/12 -16/ 12/ 2011

One more setback to the downside was achieved obviously with Friday's closing where the daily candlestick has drawn a new long upper shadow below SMA 50 as seen on the provided daily graph. In the interim, Stochastic succeeded in overlapping negatively to support our suggested bearish outlook as 38.2% Fibonacci of the bearish wave from 1.6615 to 1.5270 held as a stance preventing the pair from achieving more correction. A break below 1.5590 will weaken the support of 1.5420 and will threaten the significant low of 1.5270. Finally, we recommend reviewing the harmonic short term outlook where we studied the clear bearish direction over weekly basis.

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

Harmonic short term outlook

Support1.55901.55101.54601.53751.5270
Resistance1.56801.57801.58201.58701.5935
RecommendationBased on the charts and explanations above our opinion is, selling the pair below 1.5590 targeting 1.5270 and stop loss above 1.5780 might be appropriate.