Weekly Report (May 09-13, 2011)

The pair was caught between 23.6% and 38.2% correction after breaching the resistance for the minor ascending channel shown above. The breach signals the possibility for the pair to extend the upside correction, yet on the other hand, momentum indicators are clearly within overbought areas which might negatively pressure the pair to return to the downside. Therefore, we need to observe the pair around the critical 0.8710 support and 0.8855 resistance.

The trading range for this week is among the major support at 0.8425 and the major resistance at 0.9025.

The short term trend is to the downside with steady daily closing below 1.0330 targeting 0.8000.

RecommendationBased on the charts and explanations above we remain neutral and recommend observing the pair around the mentioned areas for more confirmations