Weekly Report 29/08 -02/ 09/ 2011

After topping at 80.20 on August, 04, the pair moved sharply to the downside, drawing an IM-impulsive wave- as seen on the provided four-hour chart. This impulsive structure was followed by the upside recovery expected in our last week's report. We classify the upside move from the significant low of 75.90 to 77.70 as the first corrective wave of the reactionary A-B-C structure; whilst setback from 77.70 to the 76.40 could be seen as B wave. A break of 77.25 is urgently needed to confirm the C wave that should complete the proposed Elliott sequence. Our technical targets reside at 161.8% projection of A wave at 78.80, followed by 79.20. Only a break of 75.90-75.80, accompanied by a four-hour closing can negate our bullish outlook. Ultimately, Stochastic is positive and MACD would turn bullish if we witnessed the aforementioned breakout.

The trading range for this week is among key support at 74.80 and key resistance now at 79.55.

The general trend over short term basis is to the upside, targeting 87.45 as far as areas of 75.20 remain intact.

Previous Report

RecommendationBased on the charts and explanations above our opinion is, buying the pair above 77.25 targeting 79.20 and stop loss below 75.80 might be appropriate.