EUR/USD Technical View

After a failed attempt to push higher on Monday and Tuesday, Euro didn’t manage to stay above the 1.3600 level and retested May 10^th support at 1.3459 only to bounce back above 1.3500. As we can see on the weekly charts the price action was undecided and we stayed inside the previous weeks trading range, the only clear thing established was a reinforcement of the 1.3630 and 1.3459 areas as a resistance and support zones respectively. A break out above or bellow the mentioned levels would certainly be in the cards on the following week, getting bellow 1.3459 would open up December 3^rd high of 1.3364 as a target followed in closely by the 1.3300 round number and January 7^th high. If Euro is going to gather some strength in the next couple of days we might see another push towards the 1.3610/30 resistance area and once there we can see the 1.3680 YTD becoming a target for longs. We will closely monitor the situation in the following days also on the lower timeframes looking for possible signs of strength or weakness for both longs and shorts.


Resistance Levels

• 1.4532 – March 2005 High
• 1.3668 – December 2004 High
• 1.3630 – May 7^th High
• 1.3523 – April 16^th Low

Support Levels

• 1.3459 – May 10^th/11th Lows
• 1.3365 – December 3^rd High
• 1.3300 – January 7^th High
• 1.3260 – February 27^th High

GBPUSD Analysis

Cable showed some additional downside bias getting bellow the 1.9840 support zone and closing the week around the 1.9750 level after bouncing from the 1.9700 round number on Friday. Although price formed a 4^th consecutive red bar on the weekly chart we have to be very careful because we are currently trading between 2 very strong levels, the 1.9840/50 resistance and the 1.9750 support. Slightly overbought conditions on the weekly charts and oversold on the daily charts have caught our attention and we should pay close attention to price action at important support and resistance zones. On the south side we have the current trading levels of 1.9750 and if we get bellow, Fridays’ low of 1.9700 is the closest support followed in by February’s 27^th high of 1.9670, lower down we have the 1.9550 a 0.50 Fib retrace line of the December-March trading range. If, on the other hand, price holds above 1.9750, in order to have a proper north move we have to clear the 1.9840/50 resistance area; and once above that the 2.00 opens up as a possible longs target on the way to the YTD high of 2.0133.



Resistance Levels

• 2.0200 – Round number
• 2.0133 – April 18^th High
• 1.9840/50 – May 4^th / December 1^st 2006 High

Support Levels

• 1.9750/60 – retested level, May 11^th low
• 1.9700 – May 18^th Low
• 1.9670 – February 27^th High
• 1.9550 - .50 Fib