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EUR/USD: The Euro has started to break down from its contracting range

Tue, Nov 11 2008, 13:22 GMT
by Benny Menashe

Finotec Group Inc.

EUR/USD: "The Euro has started to break down from its contracting range - limits $1.2725-1.2935, with $1.2725 being eroded a retest of $1.2580 looks likely - this remains the break down point to the $1.2330 low then $1.2135, a long term Fibonacci retracement. The market will stay directly offered while capped by $1.2935. Only above here negates and will retarget $1.3117/35 then $1.3300, the 38.2 percent retracement of the move down from September (not favoured)."

USD/JPY: "Neutral to positive while above the 96.80/35 yen support. We have drawn a resistance line, connecting the highs ovr the past 4 weeks - this is located at 99.73 yen currently - the market is stalling here very near term and will need to clear this in order to reassert upside pressure towards 100.55/75 yen, the recent high and the 50 percent retracement. "We currently maintain our view that the market will extend short term gains to 103.50/75 yen and fail here (the daily RSI remains positive). However we are unable to dismiss the idea that the failure at Fibonacci resistance at 100.75 yen recently (50 percent retracement of move down from August) may be an interim high. Below 96.35 yen will leave the market increasingly on the defensive triggering a slide back to 94.55 yen."

GBP/USD: "Remains under pressure. The near term chart is dominated by its 3 week downtrend, this is located at $1.5832. While capped here, further probes down to the $1.5560/35 level look likely - we saw a minor breach of this level last week and this guards the more important $1.5250/1.5125 band. This is major support - it represents the long term Fibo retracement (the 78.6 percent retracement of the entire move from $1.3680) and a 24 support line. Only a recovery above $1.5835 will alleviate immediate downside pressure for scope for recovery to $1.6430/1.6670 to become feasible."

EUR/JPY: "Range trading short term within the 122.35-131.05 yen range limits. It is struggling at present to maintain a break above its 20 day moving average at 127.32 yen, however at the end of last week the market tested and held above the 122.35 yen support and for now while above this support our stance is neutral to positive. We look for recovery to 130/131.05 yen, where we would again allow for failure."

SEB

USD/JPY: "Yesterday's failure doesn't really change anything, the potential inverse head and shoulders seen in many yen crosses are still in place, but still lacks their confirmation. Below 95.65 yen the case will however start to diminish. Moving above 99.48 yen will be an early warning of a forthcoming break”.

Published on  Tue, Nov 11 2008, 13:23 GMT