June 23rd, 2008

EURUSD failed to close below 1.5378 last week as prices moved above 1.5414, favoring further upside as mentioned in last week’s update and eventually saw prices reach 1.5651 (50% of 1.6017-1.5283) on last Friday. Prices continue to remain in a broad consolidation pattern with a major breakout imminent. Near term, look for a daily open and close below 1.5457 to see lower prices as a sustained break of 1.5300 will see momentum selling and further downside prices towards 1.5228 (50% of 1.4438-1.6017), while to the upside a sustained break of 1.5651 favors a move towards the June 9^th high ay 1.5843. As to the broad outlook, the rise from the November 2005 low at 1.1642 remains active as only a weekly close below 1.4346 will confirm the rise from 1.1642 is complete at 1.6017, with further downside risk towards 1.3830 to follow. So, near term, look for a daily open and close below 1.5457 to see further downside pressure towards 1.5300 and 1.5228, while to the upside a sustained break above 1.5651 favors 1.5843 with a daily open and close above 1.5844 confirming the rise from the May 8 low at 1.5283 is again underway targeting 1.6 and beyond.