Week on July 13-July 18, 2008

EURUSD downside last week was limited by the 50% of the 1.5302-1.5907 rise as mentioned in last week’s outlook and closed the week at a new all time high weekly close at 1.5934. EURUSD rise from the June 13^th low at 1.5302 remains active and now targets a retest of the April 22 high at 1.6017, with a sustained break targeting 1.6147 followed by 1.6428 in the weeks ahead. To the downside, intraday prices should hold initially above the 38.2% of the 1.5611-1.5969 rise at 1.5832 followed by the 50% at 1.5790, while only a sustained break of 1.5748 would suggest further consolidation from the 1.5302 rise before another attempt up. As to the broad outlook, the rise from the November 2005 low at 1.1642 remains active as only a weekly close below 1.4346 will confirm the rise from 1.1642 is complete at 1.6017, with further downside risk towards 1.3830 to follow. To the upside, look for a retest of 1.6017 while prices remain above the 1.5790-1.5832 zone.