Week of September 9, 2008

EURUSD reached 1.4047 yesterday, a few pips shy of our previously mentioned 1.4014 objective. We continue to favor rallies as selling opportunities and currently look for an intra day corrective move towards 1.4192, as we are targeting the 38.2% of yesterday’s 1.4427-1.4047 fall. The 38.2’s have consistently limited the corrections as will often be the case in any strong trend, most recently yesterday’s 1.4427 was the 38.2 of the 1.4809-1.4194 fall. Intra day, we are looking for a corrective move to the upside, with a sustained break of 1.4142 suggesting an intra day correction is unfolding with a 1 hour open and close above 1.4192 completeing the fall from 1.4427 at yesterday’s 1.4047 low, as prices will then likely trade within a 1.4192-1.4282 consolidation zone before attempting another move to the downside. As to the medium term trend from the July 15, 2008 high at 1.6037, only a daily open and close above 1.4807 will complete the fall at yesterday’s 1,4047 low with prices then likely to trade within a 1.4807-1.5277 consolidation zone before attempting another move to the downside. As to the broad outlook, we will be watching closing prices this week as the rise from the November 2005 low at 1.1642 remains active, and only a weekly open and close below 1.4358 will complete this rise at 1.6037, with prices then likely to trade within a 1.3321-1.4358 consolidation zone. However, with the never before witnessed +10 handle fall last month, a September close below 1.4085 will suggest EURUSD to continue lower into the week’s and months ahead with 1.3054 as the next objective. So, intra-day, we favor a corrective move towards 1.4192 on a sustained break of 1.4142, and as for the week, we will look for confirmation the rise from the November 2005 low is complete at 1.6037.

More updates later.

Forex Signals Plus, RW