Week on June 16-June 20, 2008

EUR/USD was unable to break above 1.5844 last week and saw a dramatic move lower reaching 1.5302 and closing the week at 1.5378. Last week’s EURUSD fall was the was the most dramatic decline in the pair since the first week of January 2005, as last week’s fall suggest further downside in the weeks ahead. A daily close on Monday June 16th below 1.5378 will indicate the intraday move lower has resumed targeting 1.5228 initially, otherwise an intraday corrective move to the upside will be confirmed should prices sustain above 1.5414 with 1.5509 (.382 of the 1.5843-1.5302 fall) as the initial target. 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. So, near term, look for a sustained break of 1.5414 to see further upside towards 1.5509 initially, while a sustained break above 1.5844 confirms the rise from May 8 low at 1.5283 is again underway targeting 1.6 and beyond.