[forex618]

Daily Currency report for Thursday July 26 2007

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This is only a guide. Please refer to our specific entry signals for exact entries and stops. Please visit Forex trading signals and instant alerts on Forex major currencies for more information.

EUR/USD

Weekly Trend direction:Bearish

Weekly trend reversal level: 1.3860

Strategy: Whilst below the weekly trend reversal level,sell rallies to resistance levelsafter an entry signal.

Medium term: The euro has broken above the large flag formation which has dominated the technical picture in 2006. Now, whilst above 1.2900 (1.2800 max), the euro remains in an uptrend which is heading back towards 1.3800, and possibly higher still, towards 1.4100.

Today's trade suggestion: A sudden plunge below the short term trend line was almost inevitable, after days of edging higher without momentum. Now we are testing the longer term trend line (see chart), but we expect that this will eventually give way as well, as the euro corrects towards first key support at 1.3680/60.(Thick red line) As weekly momentum is now bearish, we look to sell into rallies, with first resistance at 1.3780. It is possible to also take counter-trend long positions on clear signs of basing around the above-mentioned key support levels.

Key G7 Resistance levels: 1.3780

Counter-trend opportunities:Buy dips to 1.3660/80 only on clear signs of reversal.

EUR/USD Hourly chart:


EUR/USD Weekly chart: