Week of January 5, 2009

EURUSD continues to consolidate the recent 1.2549-1.4718 rise as a daily close below 1.3889 will see prices continue to move lower with 1.3634 as the next objective. as subsequent to a sustained move below 1.3889, look for prices to move within a 1.3378-1.3889 consolidation zone before another attempt to the upside. Intraday, prices are essentially trading within a 1.3850-1.4000 range with any break of this range witnessing further extension in the direction of the break.  As to the broad outlook, a monthly open and close above 1.4033 will see prices continue to move higher in the weeks that follow, as January opened the month at follow, while to the downside a monthly close below 1.2886 favors further downside risk.

More updates later. RW