December 30th, 2008

EURUSD reached 1.4365 yesterday, a few pips shy of our 1.4376 target.  However, prices failed to close on the day above 1.4165 which would have confirmed the outlook for higher prices in the days ahead.  No change in our outlook, as a daily close above 1.4165 will favor further upside potential in the days ahead with a retest of the December 18, 2008 high of 1.4718 likely, while a sustained break targets the September 22, 2008 high at 1.4866. To the downside,  a daily open and close below 1.3800 will see prices continue to move lower within a 1.3241-1.3800 consolidation zone before another attempt to the upside.

More updates later. RW