| Daily Forex Technicals | Written by FXTechstrategy | Oct 31 08 12:01 GMT | | |||||||||||||||||||||||||||||||||||||||||
| Today's Focus: EURUSD & GBPUSD
EURUSDTest and rejection of the 1.3259 level, its Oct 10'08 low Thursday has left the pair halting its recovery off the 1.2330 level and opened up downside risk towards retesting its YTD low. A hammer candle pattern (top reversal candle) is now in place on the daily timeframe and its efficacy remains valid as long as its top (1.3296) is unbroken. Medium term downtrend resumption is in the offing as a follow-through to the downside on the mentioned hammer was seen in early morning trading today pushing the pair to as low as 1.2670.Its Oct'06 low at 1.2484 is now being aimed at ahead of its Oct 28'08 low/Jan/April'06 highs at 1.2330/24.A clean break and hold below here will trigger the resumption of its medium term downtrend towards the 1.1827 level, its Mar'06 low and eventually the 1.1640 level, its Nov'05 low. We continue to watch G10 currency universe and our own 7 currency model which are either spotting one reversal candle or the other suggesting price weakness in the present corrective recoveries. Resistance for EUR are now seen at the 1.2728 level, its Oct 22'08 low and the 1.3005/58 area, its Oct 23'08 high/.618 Ret (0.8231-1.6038 rally, monthly chart) and then the 1.32596 level, its Oct 10'08 low/Oct 30'08 high. On the whole, EUR's medium term decline off the 1.6038 level is now at risk of being activated following its rejection of higher level prices.
GBPUSDLike its EUR counterpart, GBP is now at risk of facing downside weakness exposing a plethora of support levels following its failure ahead of the 1.6786 levels (Oct 10'08 low) and subsequent collapse forming a long-legged doji on Thursday. A negative close today will complete the formation of an evening star (top reversal formation) candle pattern which will even increase odds of further losses. Downside targets are located at the 1.6000 level, its psycho level before its Aug'2003 low at 1.5471 and subsequently the 1.5265 level, its Oct 24'08 low. Below the latter is required to activate its medium to longer term decline started at the 2.1161 level in Nov'07.Daily RSI which is now turning lower remains supportive of this scenario. On the upside, initial resistance lies at the 1.6347 level, its Oct 23'08 high followed by the 1.6673 level, its 0ct 30'08 high with a break of there paving the way for a move towards the 1.6786 level. In short, loss of momentum ahead of its strong resistance level (1.6786) now highlights lower prices.
Mohammed Isah This report is prepared solely for information and data purposes. Opinions, estimates and projections contained herein are the author's own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed to be reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness and neither the information nor the forecast shall be taken as a representation for which the author incur any responsibility. The does not accept any liability whatsoever for any loss arising from any use of this report or its contents. This report is not construed as an offer to sell or solicitation of any offer to buy any of the currencies referred to in this report | |||||||||||||||||||||||||||||||||||||||||
Friday, October 31, 2008
Daily Technical Strategist
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