Week of August 14, 2008-European Session

Earlier in the week our weekly outlook favored a continuation of the move lower in EURUSD with 1.4969 sited as a key level, with a sustained break below this level risk will favor continued downside risk. Yesterday saw the pair test 1.4981 which is the 61.8% of this weeks range, so, intraday, we continue to view this level as key to any upside potential, with a sustained break targeting 1.4994 followed by 1.5083. Look for a 30 minute close above 1.4930 to support a move to the upside for a retest of yesterday’s high. However, the medium term trend remains down as only a daily close above 1.5282 will take the pressure of the downside risk and confirm the fall from 1.6037 is complete at 1.4816, with further consolidation within a 1.5282-1.5427 zone before another attempt to the downside. Intraday, the EURUSD and most of the other USD pairs remain in a consolidation pattern resulting in choppy price action. As to our outlook for today, we see potential for an extension to the upside with JPY pairs and will look for opportunities here, while USDCAD is attempting to establish an intraday trend favoring further move lower. Overall, the present intraday market conditions have a higher than normal risk present as we will move forward with caution until we see better opportunities unfold. We will have more updates later.

Forex Signals Plus, RW