Week of September 4, 2008

EURUSD reached a low of 1.4385 yesterday, just a few pips shy of our 1.4358 target sited in our August 12, 2008-8:00 GMT update. Nearterm, EURUSD is in a intra day corrective phase from the August 21, 2008 high at 1.4909, as a daily close above 1.4585 will complete the near term fall at yesterday’s 1.4385 low, with prices subsequently moving into a 1.4585-1.4708 consolidation zone before attempting another move to the downside. The medium term fall from the July 15, 2008 high at 1.6037 remains active as ONLY a daily open and close above 1.5016 will complete this fall while 1.4385 holds, as prices will then move into a 1.5016-1.5406 consolidation zone before attempting another downside move. 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 complete this rise while 1.6037 holds, with prices subsequently moving into a 1.4358-1.3321 consolidation zone before attempting another move to the upside. Intra day, continue to look for more upside potential while prices hold above 1.4483, as 1 hour open and close below 1.4483 will suggest further consolidation within a 1.4445-1.4483 intra day consolidation zone with a sustained break back above 1.4505 confirming the intra day corrective rise is once again underway, while to the downside, a 1 hour open and close below 1.4422 favors further downside extension with 1.4358 as the next objective. For the session ahead, favor buying dips for a 1.4585 initial target.

GBPUSD trend remains firmly to the downside with 1.7421 and 1.7058 as the next objective. As to the near term fall from the August 21, 2008 high at 1.8793, prices have since reached 1.7664 yesterday with GBPUSD currently in a intra day corrective phase as a daily close above 1.8096 completeing the fall from 1.8793 at yesterday’s 1.7664 low. As to the medium term fall from the July 15, 2008 high at 2.0155, only a daily open and close above 1.8616 will complete this fall while 1.7665 holds, as prices will subsequently move within a 1.8616-1.9204 consolidation zone before attempting another move to the downside. Please read the our GBPUSD outlook dated August 26, 2008.

More updates later.

Forex Signals Plus, RW