Richard Perry
Independent Analyst
Friday's session was fairly circumspect as traders attempted to evaluated the potential risk posed from developments in the Portuguese banking system. This was reflected in the "doji" candlestick that was formed (opening and closing at the same level). The mood that resulted in this uncertain candle has filtered into the new week, with very little movement in the Asian trading and trding around the $1.3600 level. The big plus for the bulls has been that the key support band $1.3574/$1.3585 remains intact and the longer this continues without being breached the more confident they will become. However, despite momentum indicators not being overtly negative there is a distinct negative slant as they have merely unwound back to neutral and look set to deteriorate once more. Moving averages are falling away with the 55 day ma (at 1.3665) a basis of resistance now. I would continue to play rallies towards $1.3640 as a chance to sell. The bears remain in control until a decisive break above $1.3700.
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