Week of November 20, 2008

EURUSD continues to find offers on rallies as trendline resistance from the October 30, 2008 high at 1.3298 comes in today at 1.2695 with a 2 hour close above this level seeing further upside, while at this juncture risk remains firmly to the downside with much lower prices in the days and weeks ahead.   However, prices need to sustain below 1.2400 with a daily close below this level confirming prices will continue to move lower targeting 1.2132 and eventually the November 2005 low at 1.1642.  As mentioned in our August 21, 2008 update, there is risk for a much deeper correction in the broad outlook with a monthly open and close below 1.3054 confirming prices will continue to move lower within a 1.1210-1.3054 consolidation zone before attempting another push to the upside.  As to the intraday outlook, a 1 hours open and close above 1.2601 suggest prices will continue to move higher intraday within a 1.2602-1.2683 consolidation zone before attempting another move to the downside.

More updates later. RW