[forex618]

Daily Currency report for Wednesday August 1 2007

Get our newG7 Forex system for yourself (FREE E-book!) www.forex-science.com

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: Little change as the euro dithers above the 1.3600 level, but below resistance at 1.3720. Weekly momentum is bearish, which means we still look to sell into rallies, with 1.3720 now seen as an important intermediate top. (above here and 1.3800 should stop any rallies) Wave analysis suggests we still have another leg lower to go, which might take the euro down to 1.3550/70 (200 SMA, previous S/R and 50% Fib), where counter-trend longs might be a possibility. watch to sell at 1.3720, or to buy near 1.3550, only on clear signs of reversal. Below 1.3550 (unlikely on first attempt) means another drop to 1.3400/20. Watch here for a bounce.
Key G7 Resistance levels: 1.3720, 1.3800

Counter-trend opportunities:Buy at 1.3550

EUR/USD Hourly chart:


EUR/USD Weekly chart: