Daily Technical Strategist :

Daily Forex Technicals | Written by FXTechstrategy | Nov 06 08 10:41 GMT |

Today's Focus: EURUSD & GBPUSD EURUSD: While Indecision And Consolidation Shape Up, The 1.3259/98 Area Is Still Expected To Attract Sellers GBPUSD: Nearer Term Direction Remains Unclear EURUSD While price action is limited to the 1.2330 level, its YTD low and the 1.3259/98 area, its Oct 10'08 low/Oct 30'08 high, EUR looks to trade sideways consolidating its recent medium term decline off the 1.6038. This is clearly evident on its 4 hourly chart where a symmetrical triangle (two converging trendlines drawn along falling swing highs and rising swing lows) has now formed. This pattern usually resolves in the direction of the underlying trend but that does not occur always. Having said that, our overall medium term outlook remains to the downside for a break of the 1.2330 level and resumption of the pair's declines started at the 1.6038 towards the 1.2134 level, its .50 Ret (its 0.8231-1.6038 high, monthly chart) ahead of the 1.1827 level, its Mar'06 low and subsequently its Nov'05 low at 1.1640.Resistance is now seen at 1.3058/05 level, Oct 23'06 high/.618 Ret (0.8231-1.6038 rally, monthly chart) with a turn above there targeting the next two upside objectives at the 1.3259/98 area, its Oct 10'08 low/Oct 30'08 high and the 1.3666 level, its Dec'04 high. The consolidation highlighted above is now seen in most G10 currency universe plus our 7-currency model analysis. On the whole, while the market takes a rest, the completion these consolidation patterns is expected to break in the direction of the primary trend. Support Comments 1.2728 Oct 22'08 low 1.2484 Oct'06 low 1.2330/24 Oct 28'08 low/Jan/April'06 highs 1.1827 Mar'06 low Resistance Comments 1.2866 Jan'07 low 1.3058/05 Oct 23'06 high/.618 Ret (0.8231-1.6038 rally, monthly chart) 1.3259/98 Oct 30'08 high/Oct 10'08 low 1.3666 Dec'04 high GBPUSD A similar pattern (symmetrical triangle) is also present on the GBP 4 Hourly chart with its own approaching the apex of the triangle. Breaking either way will suggest nearer term directional moves. With medium to long term outlook remaining to the downside, consolidation activities are likely to favour the continuation of that trend. Support runs from its April'03 low at 1.5461 to the 1.5219 level, its Oct'02 low where a break is expected to resume the pair's weakness off the 2.1161 level towards its psycho level at 1.5000 and then the 1.4837 level, its Oct 2001 high while resistance levels are located at the 1.6000 level, its psycho level accompanied by the 1.6347 level, its Oct 23'08 high with a break through there opening the door for further higher prices towards the 1.6673 level, its 0ct 30'08 high. All in all, as 4 Hourly symmetrical triangle is shaping up for a breakout, GBP still maintains its overall bearish tone. Support Comments 1.5461/71 April'03 low/Aug'03 low 1.5265 Oct 24'08 low 1.5219 Oct'02 low 1.5000 Psycho level Resistance Comments 1.6000 Psycho Level 1.6347 Oct 23'08 high 1.6576 Jan'03 high Mohammed Isah Market Analyst www.fxtechstrategy.com 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