Weekly Report 11/07 -15/ 07/ 2011

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One more negative weekly closing was achieved below 100% Fibonacci retracement of CD leg for our caught bearish harmonic butterfly pattern at 130.05. This is another negative technical factorthat confirms our previous 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 is still showing bearish sign; whilst Vortex reflects the strength of the bearish trend that started from D point of the aforesaid harmonic formation. Furthermore, the descending channel provides the bearish trend with the protection it needs. Breaching 128.40 zones will accelerate the bearishness anticipated for this week.

The trading range for this week is among key support at 123.95 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

Support128.40127.60126.70125.50123.95
Resistance130.00131.60132.50133.15133.65
RecommendationBased on the charts and explanations above our opinion is, selling the pair around 129.40 targeting 125.50 and stop loss above 132.00 might be appropriate.