One week ahead (02.04.2008-02.11.2008)

EURUSD
The Euro rose versus the US dollar during the past week and has reached highs in the 1.49 zone but it failed to establish fresh record highs above the 1.4960 mark although the NFP data encouraged such scenario. It looks that the Euro is not ready yet to climb higher and it currently ranges violently below the 1.5 zone lacking the strength required to rise further. The surprising dollar recovery of the last Friday is giving us some clues that the downside is guardedly favored and the Euro sits on a fragile ground right now. Looking at the 4 hours chart below we notice that the pair exited the upward channel, weakening the support at 1.4800. While it holds above the 1.4800 mark which also consists on the support formed by the 50 fib retracement of the previous week’s upward swing, the Euro may still recover and look for support above the 1.4860 as soon as possible to signal a recovery which may bring the strong resistance of 1.4930 once again on our attention. A potential break of the support at 1.4800 may extend the decline sharply towards the 1.4660 level within a few days. The support level at 1.4660 also coincides more or less with the 50 fib retracement of the AB swing seen on the daily charts below. High risk stands on both sides right now and it will take a while until the market will be stable and we will get to look happily at the key levels which may provide good entry points without fearing that the market will range for hundreds of points within a few hours in a “stop-loss hunting” manner. On a mid-term basis, we are expecting the US dollar to strengthen, especially if it manages to break the first key support levels at 1.4800 and within the 1.47-1.48 range. Current exchange rate is 1.4836 / below today’s pivot @1.4840.
EURUSD 4 hrs chart:


EURUSD daily chart:

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Post tags: EURUSD, weekly outlook