Week of September 15, 2008

EURUSD reached a 1.3882 low last week, a few pips shy of our previously mentioned 1.3840 objective. Currently, the pair is in a corrective phase of the short term fall from the August 21 high at 1.4909. as the sustained break of 1.4272 completes the fall from 1.4909 at 1.3882, with prices likely to trade within a 1.4274-1.4516 zone before another push to the downside. As to the upside, a daily open and close above 1.4516 suggests further upside potential with 1.4705 as the objective, as a daily open and close above 1.4705 will complete the medium term fall from 1.6037 at 1.3882. As to the downside, a sustained break of 1.4139 will suggest prices are once again moving lower with 1.3840 followed by 1.3321 as the next objectives.

The broad outlook from the November 2005 low at 1.1642 is now complete at 1.6037, as last weeks open and close below 1.4358 confimed the rise from 1.1642 is now complete at 1.6037. Look for weekly closing prices to remain within a 1.4358-1.3321 consolidation zone before another push to the upside, as a weekly open and close above 1.4935 will suggest a new rise is underway from the last weeks 1.3882 low, while a weekly open and close below 1.3321 will confirm further downside potential.

Intra day, risk remains to the upside as only a 1 hour open and close below 1.4257 will compelete the short term corrective rise from 1.3882 at 1.4489, with prices then likely to trade within a 1.4114-1.4257 consolidation zone, as a sustained break of this zone will see further extension in the direction of the break.

GBPUSD continued to move lower last week reaching 1.7444, as the short term fall from the August 21, 2008 high at 1.8793 is now complete at 1.7444 with today’s sustained break of 1.7959. Intra day, look for prices to remain within a 1.7959-1.8278 zone before attempting another push to the downside, as a 1 hour open and close below 1.7781 will confirm prices will continue to move lower with 1.7444 as the next objective, while to the upside, a 1 hour open and close above 1.8278 will suggest further upside potential with 1.8475 as the next objective. As to the medium term fall from the July 15, 2008 high at 2.0155, only a daily open and close above 1.8480 will complete this fall while 1.7444 holds, as prices will then trade within a 1.8480-1.9119 zone before another push to the downside.

Our outlook remains bullish USD into the weeks and months ahead, as the current USD selling is only corrective at this juncture and any USD selling should be used as opportunities to postion for further USD gains.

More updates later.

Forex Signals Plus, RW