Week of August 15, 2008-European Session

The US Dollar continues to carve out broad gains as the USD strength is evident throughout all USD pairs. As to the weak currency, GBP remains broadly weak as the US Dollar, Euro, CHF and JPY have all made gains against the GBP today. The USDHF reached a high thus far in the session of 1.0006, just 6 pips shy of our forecast sited in our August 6 European session outlook. For the session ahead, our focus will be on the USD pairs as all USD pairs could see an extension of the current intra day moves already witnessed today.

EURUSD’s intra day fall from yesterday’s 1.4950 high has reached a low of 1.4698 as of this writing, just a few pips shy of our 1.4671 previously sited target. Look for the EURUSD to hold under near term resistance at 1.4778, as any failure to sustain above this level will favor further downside risk. The objective remains 1.4358, as this represents the 38.2% of the rise from the November 2005 low at 1.1642 and the recent July 15 high at 1.6037. The current fall from 1.6037 will remain active until prices close on a daily basis above 1.5209 while prices hold above today’s low at 1.4698. However, the move lower witnessed in the EURUSD in recent days is just the initial impulsive wave to the downside, as a corrective wave to the upside will occur at some point, with another downside attempt to follow.

As to our results, the week remains positive as does the month at hand, with 82 winning trade days out of the last 86 trade days and 15 out of the last 16 weeks positive. We will continue our efforts to improve the delivery of our trading recommendations and look forward to the opportunities as they unfold in the months ahead. Please look for our special FX update which we will have published during the upcoming weekend.

Forex Signals Plus, RW