Week of August 4-8, 2008

EURUSD moved lower last week as our forecast for a 2 hour close below 1.5847 would see prices move lower was spot on, while for now, the 61.8% of the 1.5302-1.6037 at 1.5583 has essestially held. The EURUSD really needs to close and sustain below this level which will suggest prices will continue to move lower targeting 1.5459 followed by the June 13, 2008 low at 1.5302. However, the medium term rise from the December 12, 2007 low at 1.4309 reamins active as only a daily open and close below 1.5377 will confirm this rise is complete at 1.6037. As to the upside, a sustained move above 1.5714 (.382 of the 1.6037-1.5514 ) will suggest further consolidation ahead within a 1.5714-1.5837 zone, while only a daily close above 1.5925 will confirm a new rise from 1.5514 was underway targeting the all time highs and beyond.

Tuesday, August 5, the FOMC (Federal Open Market Committtee) announces their rate decison as expectations are for no change with rates holding at 2.0%. Following the announcement will be the accompanying statement which may indicate the future rate outlook in the months ahead.