[forex618]

Daily Currency report for Tuesday August 7 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:Little change as we consolidate below 1.3840. There are signs across the board that a significant dollar rally is possible this week, so our analysis and strategy remains unchanged: With a bit of luck, we will hold below 1.3850, but we must now allow for another spike through here just to rattle the uncertain. This is not an uncommon pattern, but caution is required as a new rally is certainly not out of the question. For today, whilst below 1.3850, the chance of another sudden drop is quite good and we look to sell into rallies/hold shorts from 1.3850 region, with a first target of 1.3720, and then 1.3620.

Key G7 Resistance levels: 1.3850, 1.3900

Counter-trend opportunities:Sell 1.3900/1.3920, stops above 1.3950

EUR/USD Hourly chart:


EUR/USD Weekly chart: