Week of December 17, 2008

EURUSD has sustained above 1.3896 as prices continued to move higher reaching 1.4191 during today’s Asian session.  Prices have now moved within a broad 1.3745-1.4620 consolidation zone, as a daily close above 1.4183 will see further upside towards 1.4620, while a daily close below 1.3745 will see further downside towards 1.3479.  As to the rise from the October 13, 2008 low at 1.2387, this rise remains active as ONLY a daily close below 1.3502 will complete this rise while today’s Asian session high of 1.4191 holds, as prices will then move within a 1.3076-1.3502 consolidation zone before another attempt to the upside. Intraday, look for firm support ahead of 1.3976 as a 2 hour open and close below this level will see further downside risk with potential for 1.3842 while to the upside a 1 hour open and close back above 1.4104 will see further extension towards 1.4183 and beyond.

More updates later. RW