Week of October 23, 2008

EURUSD has reached a low of 1.2726 during late US session Wednesday, just 15 pips shy of the 1.2711 target mentioned in the October 6, 2008 update.  As to the current fall from this week’s 1.3529 high, only a daily close above 1.3033 will complete this fall while 1.2726 holds, as prices will subsequently move within a 1.3033-1.3223 consolidation zone before another attempt to the downside, while a sustained move above 1.3340 will suggest prices to continue higher with this weeks 1.3529 high as the objective.  With regard to the fall from the September 22, 2008 high at 1.4866, only a daily open and close above 1.3543 will complete the fall while 1.2726 holds, with prices then moving within a 1.3543-1.4049 consolidation zone before attempting another move to the downside.  Risk remains to the downside with 1.2679 followed by the Novermber 2005 low of 1.1642 the next objectives.

GBPUSD reached the 1.6539 objective and went as low as 1.6134 on Wednesday with potential for further downside risk targeting 1.5447 and eventually 1.3682 in the months ahead.  As to the current active wave from this week’s 1.7510 high, only a daily close above 1.6662 will complete this fall while 1.6134 holds, as prices will then move within a 1.6662-1.6988 consolidation zone before attempting another move to the downside. With regard to the fall from the September 25, 2008 high at 1.8666, only a daily open and close above 1.7101 will complete this fall while 1.6134 holds, as prices with then move within a 1.7101-1.7699 consolidation zone before attempting another push to the downside.

More updates later.