Directional Bias:
Nearer Term –Mixed
Short Term –Bearish
Medium Term –Bearish

URUSD - Range trading and consolidative price activities are set to dominate EUR nearer term as a failure ahead of the 1.2330 level, representing its YTD low has now pushed the pair into a sideways trading range. This is coming on the back of a break out to the downside from its 4 hourly symmetrical triangle the past week.

With that said, EUR must break either way through the 1.3298 or the 1.2330 level to establish directional moves but based on our model trend and EUR’S medium term trend which are both down, we expect the pair to come out of consolidation breaking below the 1.2330 level. In such a case, the 1.2134 level, its .50 Ret (its 0.8231-1.6038 high, monthly chart) and the 1.1827 level, its Mar’06 low will be aimed at.

On the upside, continued strength within the range will call for a move towards the 1.3058/05 level, its Oct 23’06 high/.618 Ret (0.8231-1.6038 rally, monthly chart) ahead of the 1.3259/98 level, its Oct 30’08 high/Oct 10’08 low and next the 1.3666 level, its Dec’04 high. On the whole, while the pair’s MT trend remains lower, breaking out of the range remains a challenge in the near term.

This entry was posted on Sunday, November 16th, 2008 at 1:36 pm and is filed under Weekly market comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.