Weekly Report 02/01 -06/01/ 2012

The pair has retraced mildly during the last day of trading of year 2011, but we will have a look at the weekly basis from a pure harmonic point of view where we will notice a potential harmonic Butterfly pattern staring from X2 pint; whilst starting from X1 gives us a possible Bat pattern. As far as trading continues below 1.5780,Cable will continue forming the CD leg of the above seen harmonic possibilities. Thus; the bearishness is still favored during this week supported by coverage provided by moving averages. A break of 1.5460 will accelerate declines.

The trading range for this week is among key support at 1.5180 and key resistance at 1.5880.

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 around 1.5585 targeting 1.5270 and stop loss above 1.5780 might be appropriate.