Weekly Report (June 27 - July 01, 2011)

The chart shows the formation of strong support around 0.8335, where the pair hit this levels twice and rebounded to the upside. Stochastic is within overbought areas, while RSI is neutral. Stability above 0.8305 might extend the upside move, while breaching this level will extend the downside move affected by Stochastic. Assessing the sideways range dominating the pair, we expect the pair to test MA 50 areas and might extend to the resistance for the range around 0.8535. Therefore, as far as trading is stable above 0.8305 areas, the upside potential remains valid; breaching those areas will extend the current bearishness.

The trading range for this week is among the major support at 0.8170 and the major resistance at 0.8600.

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 recommend buying the pair around 0.8335 targeting 0.8535 and stop loss with four-hour closing below 0.8305 and if the stop loss was triggered we recommend selling the pair with four-hour closing below 0.8305 targeting 0.8170 and stop loss above 0.8420 might be appropriate