Week of July 27-August 1, 2008

Last week saw the EURUSD fail to sustain prices to the upside as our forecast for a 2 hour close below 1.5847 would favor further downside towards 1.5783 followed by 1.5737, as prices eventually reached 1.5628. The US dollar has made some recent gains since reaching the all time low against the Euro at 1.6037 on July 15, 2008, however, the trend remains for a weaker dollar into the months ahead as the the medium term and long term trends clearly favor further USD weakness. Specifically, the medium term rise from the December 20, 2007 low at 1.4309 remains active as only a daily open and close below 1.5377 will confirm the rise from 1.4309 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 confirm the rise from 1.1642 is complete at 1.6037. Intra day the EURUSD rise from the June 13, 2008 low at 1.5302 is complete at 1.6037 as the pair currently remains in a 1.5583-1.5756 consolidation zone as a sustained break of this zone will likely see further extension in the direction of the break.

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