Weekly Report 04/07 -08/ 07/ 2011

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Friday's closing below 100 Fibonacci retracement of CD leg for our caught bearish harmonic butterfly pattern at 130.05 is another negative technical factor which confirms our suggested bearish scenario. Our bearish predications are based on harmonic rules where the technical journey of reaching the extended objectives of the pattern is still in progress towards 127.2% followed by 161.8% projections of CD leg. In the interim, Stochastic started to show some kind of exhaustion entering overbought areas; whilst Vortex still reflects the strength of the bearish trend started at D point of the aforesaid harmonic formation. Breaching 129.40 is needed to confirm the scenario suggested for this week.

The trading range for this week is among key support at 125.50 and key resistance at 134.20.

The general trend over short term basis is to the downside, targeting 118.80 as far as areas of 150.75 areas remain intact.

Previous Report

Support129.40128.40127.60126.70125.50
Resistance130.50131.60132.50133.15133.65
RecommendationBased on the charts and explanations above our opinion is, selling the pair with a breakout below 129.40 targeting 124.80 and stop loss above 132.50 might be appropriate.