Week of September 12, 2008

EURUSD continued to move lower yesterday reaching 1.3882 during the early US session, however, prices were unable to hold below 1.3900 and have essentially been limited by the multi year trendline which begins with the February 2002 low at 0.8563 and comes in today at 1.3910. As to the intra day outlook, prices are correcting higher with 1.4090 as the next obejective, as this represents the 38.2 of this weeks 1.4427-1.3882 fall. In recent weeks these 38.2’s have proven to very reliable levels to set new intraday short positions, so, we will be looking for confirmation to sell EURUSD should this level hold. However, a sustained break, such as a 1 hour open and close above 1.4090, will complete the fall short term from 1.4427 at 1.3883 with prices then likely to trade within a 1.4090-1.4219 consolidation zone before attempting another move to the downside. As to the medium term fall from the July 15, 2008 high at 1.6037, this fall remains active as only a daily open and close above 1.4705 will complete the fall while 1.3882 holds, with prices then likely to trade withinca 1.4705-1.5214 zone before attempting another move to the downside. So, intra day, look for prices to continue to correct higher towards 1.4095, with a sustained break favoring further upside towards 1.4154.

More updates later.

Forex Signals Plus, RW