Weekly Report (May 16-20, 2011)

The pair is consolidating within a tight trading range above the breached descending channel's resistance, which was previously considered a signal for resuming the upside correction. Stochastic is trading within overbought areas that might pressure the pair negatively and keep the volatility evident around the retest 80.60. In general, we see the likelihood for the pair to move to the upside this week which required breaching SMA 50 -currently around 81.75- and also stability with daily closing above 80.60.

The trading range for this week is among the major support at 79.00 and the major resistance at 83.50.

The short term trend is to the downside as far as 89.35 remains intact with targets at 77.70.

Previous Report

Support80.6080.0579.8079.0078.40
Resistance81.7582.5083.0083.5083.90
RecommendationBased on the charts and explanations above our opinion is buying the pair with hourly closing above 81.75 targeting 83.50 and stop loss below 80.60 might be appropriate this week