Weekly Report (May 16-20, 2011)

The pair's upside move stopped near the resistance for the descending channel, supported by the 50% Fibonacci correction and the negativity on momentum indicators. Therefore, we see the likelihood for a downside move this week to resume trading within the breached descending channel targeting 0.8740 and 0.8650. Breaching areas of 0.8965 with daily closing above it will extend the upside correction and carry the pair outside the bearish wave mentioned.

The trading range for this week is among the major support at 0.8650 and the major resistance at 0.9150.

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

Previous Report

Support0.88500.87900.87400.86500.8600
Resistance0.89650.90400.91050.91500.9190
RecommendationBased on the charts and explanations above our opinion is buying the pair with the breach of 0.8850 targeting 0.8650 and stop loss above 0.8965 might be appropriate this week