Week of August 20, 2008-Trade Update

At this writing the USD has made broad intraday gains while GBP remans broadly weak. EURUSD is holding within the previoulsy mentioned 1.4696-1.4737 consolidation zone, as today’s sustained break of 1.4737 saw prices move lower reaching 1.4688 low as of this writing. We expect further extension of today’s intraday move as we are looking for confirmation to sell EURUSD, GBPUSD, AUDUSD and buy USDCHF, USDCAD as we move into the US sesssion. As to EURUSD, we will look for levels to establish intraday short postions while a sustained break of 1.4670 suggest prices will continue to move lower initially targeting yesterday’s 1.4628 low, while to the updside, any sustained break above 1.4761 will eliminate intraday downside risk and suggest prices will continue to move higher with 1.4802 as the objective.

As to GBPUSD, the short term fall from last weeks 1.9256 high remains active, as only a daily open and close above 1.8796 will complete this fall at Friday’s 1.8512 low. On an intraday basis, todays fall from 1.8684 to the current intraday low at 1.8542 suggest prices will continue to move lower today with a 30 minute open and close above 1.8596 compeleting today’s fall from 1.8684 at 1.8542, suggesting further intraday consolidation within a 1.8596-1.8630 consolidation zone, otherwise, the move lower remains active with last weeks low at 1.8512 as the intial target. However, the 4 hr chart suggest a bottoming formation and divergence which indicates prices will move higher before attempting another move to the downside, so, to the upside, while the current intraday low at 1.8542 holds, a 30 minute open and close above 1.8650 will eliminate any intraday risk to the downside and suggest prices will continue to move higher with potential for 1.8712. ad beyond. But in that the trend remains down, for the session ahead, we favor selling GBPUSD for a retest of last Friday’s 1.8512 low while prices remain below 1.8630. Please read Monday’s GBPUSD outlook as we will have a similar outlook for EURUSD published later today. Also, please read our June 25, 2008 update as we believe all who read will find the information useful.

Forex Signals Plus, RW