May 19th, 2008

EURUSD was essentially range bound last week as suggested in the May 11^th weekly update, as the weekly chart is nearing confirmation for a buy with 1.6173 as the objective. However, a weekly close above 1.5650 this week is needed to confirm as the next targets would be 1.5737, 1.5844 and 1.6173. Following a weekly close above 1.5650 would then be a weekly close above 1.5844 (76.4 of the 1.6017-1.5283), as this would fuel momentum buying for a test of the all time high at 1.6017 and eventually 1.6173. To the downside, a daily open and close below 1.5365 would be a very bearish confirmation and suggests the fall from 1.6017 has resumed with 1.5163 (38.2 of 1.4309-1.6017) as the next objective.