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Currency Technical Report

Fri, Oct 31 2008, 11:00 GMT
by George Antonakos

FXGreece

Resistance: 1,2830/ 1,2865-751,2940/ 1,3000/ 1,3050
Support : 1,2700-10/ 1,2620/ 1,2575-80/ 1,2500/ 1,2440/ 1,2390/ 1,2330…

Comment: Yesterday’s negative day with the reversal candle formation above important resistance levels, is a sign that brings back euro’s negative sentiment, as we had mentioned in our previous analysis.
For a clear trend reversal we should see a break of important support at 1,2585-2600, but the current signs indicate that euro could move to these levels or even lower. A sideways consolidation may be forming and we should wait to see its ranges…
First important support for today is found at 1,2730-50 and a break could lead to 1,2585-2610 area, where next important support is found. It will indicate that the rise was a result of profit taking and a retracement to previous lows or even lower will be possible…
An optimistic scenario would be euro’s sharp move above 1,2900-10, testing the first important resistance levels at 1,3000-30. A move above these levels could cancel the reversal signs and bring the area of 1,3250-3300 back in the game. The daily and weekly close will give the next signs regarding the following week’s strategy…

STRATEGY
Buy : The break of support levels and the candle in the daily chart make us cautious regarding buy positions and we should keep them small. We will allow a wider retracement for buy positions at 1,2630 and 1,2580, with stops below 1,2540. Our target would be 1,2700 area…
Buy positions could also be tried at a reach of previous lows (1,2330-50), or at a possible upward break of 1,2900-10 expecting a resumption to 1,3000-30…

Sell: Sell opportunities emerge today with first target at 1,2600-30 area. We can also try sell orders at current levels or in a reaction towards 1,2900. Alternatively, at a downward break of 1,2730…
In case o f a wider reaction formation and a reach of 1,3000-3030, we could try sell positions with stops above 1,3070…
A downward break of 1,2580 may be used for additional sell positions with target at 1,2420-40…

Published on  Fri, Oct 31 2008, 11:03 GMT