Weekly-Daily Forex Technical View – November 12, 2007

EUR/USD Technical View

Euro opened the week finding some resistance around the 1.4500 level and we witnessed a small drop on Monday, for the rest of the week the pair moved higher making higher highs all of this culminating with Friday’s top at 1.4735. Most of the week was in line with our bullish assessment, and only Friday’s price action came as a surprise, after printing a new high rumors started that resulted in a US dollar strengthening across the board and made EurUsd form a doji like bar on the daily charts. The start of next week will help us determine if the US dollar gave us a strong reversal signal or the latest move was just a small correction. Closest support is represented by the up sloping trendline we can see on the daily charts, that should offer a good base for a new bounce up considering it’s also very close to the 1.4600 support level.

Resistance Levels

• 1.5000– round number
• 1.4735 –Nov 9th High

Support Levels

• 1.4500- round number
• 1.4300 – Sept 30th High
• 1.4000 – Round number
• 1.3850 – July 24th High

GbpUsd Technical View

Cable opened last Sunday night trading just below 2.0900 and slipped lower on Monday to form what proved to be the weekly low at 2.0775; the rest of the week GbpUsd pushed higher making record tops every day, breaking above 2.1000 and 2.1100 to reach an all time high of 2.1142. Friday’s violent move caught most technical traders by surprise as it was triggered by a UK banking rumor, at the end of the day cable lost more than 350 points and closed the week trading just a few points above 2.0900. The pair was in an overbought area close to the upper side of the channel it has been trading in for the last few months and the rumor just gave bears a good opportunity to put pressure and to sink the pair. As far as technical levels are concerned a continuation of Friday’s move will get the pair close to the 2.0775 support level which is also close to the 31.8 Fib retracement level of the last move up from 2.0245 to 2.1142. A bounce from the current levels will shift focus once again on the 2.100 level Friday’s 50. Fib Line and if we look higher up towards the YTD high at 2.1142.

Resistance Levels

• 2.1148 – Nov 9th High
• 2.1065 – Nov 7th High

Support Levels

• 2.0650 – July 24th High
• 2.0460 – August 3rd High
• 2.0365 – September 12th High
• 2.0200 – Round number