Week of August 5, 2008

EURUSD daily chart is at a critical juncture, as today’s daily close will determine where the pair goes next in the days ahead. However, the medium term rise from the December 12, 2007 low at 1.4309 remains active, as only a daily open and close below 1.5377 will confirm this rise is complete at 1.6037. As to the broad outlook, the rise from the November 2005 low at 1.1642 remains active as only a weekly open and close below 1.4358 will complete this rise at 1.6037. As to the current daily chart, there are multiple indicators which may confirm with today’s close that the pair will continue to move much lower in the days ahead, however, one in particular is the daily 100 period EMA. Prices tested this EMA 3 times in 2008 but have failed to close on a daily basis below this EMA, and not since April 2005 have prices sustained below this level, as during that period the EURUSD was in the early stages of a corrective move lower of the 0.8346-1.3667 rise, eventually reaching 1.1642 in November 2005, just 8 pips shy of the 38.2% level at 1.1634. Additionally, now that prices have sustained below the previously mentioned 1.5583 level, which is the 61.8% of the 1.5302-1.6037 short term rise, the outlook favors a continued move lower with the 1.5459 followed by 1.5302 as the next objective. To the upside, only a daily close above 1.5583 in the nearterm would favor continued consolidation within a 1.5583-1.5756 zone.