Weekly Report 24/10 -28/ 10/ 2011

The pair is stable below 23.6% Fibonacci correction of the CD leg of the bearish Butterfly harmonic pattern. The pattern's first target at 0.8695, which represents 38.2% Fibonacci correction of the same leg, was not achieved yet, while consolidation below 0.8930 supports the possibility of the downside movement. Stochastic attempts to provide a positive crossover, but this reversal needs to be confirmed by stability above 0.9030, while any trading below this level drive us to expect the downside movement to continue.

The trading range for this week is among the major support at 0.8505 and the major resistance at 0.9185.

The short-term trend is to the upside with steady weekly closing above 0.8020 targeting 0.9400.

Previous Report

RecommendationBased on the chart and explanations above, we recommend selling the pair around 0.8920, and take profit in stages at (0.8695 and 0.8700) and stop loss above 0.9030 might be appropriate this week.