[forex618]

Daily Currency report for Friday February 09 2007
This is only a guide. Please refer to our specific entry signals for exact entries and stops.
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This Week's Economic Calendar

DateETReleaseForActualBriefing.comConsensusPriorRevised FromFeb 0510:00ISM ServicesJan 56.057.056.7 Feb 0708:30Productivity-PrelQ4 1.5%1.7%0.2% Feb 0710:30Crude Inventories02/02 NANA2684K Feb 0715:00Consumer CreditDec $8.0B$6.5B$12.3B Feb 0808:30Initial Claims02/03 310K310K307K Feb 0810:00Wholesale InventoriesDec 0.7%0.6%1.3%
EUR/USD
Weekly Trend direction: Bullish
Weekly trend reversal level: 1.2860
Support levels: 1.2920, 1.2880, 1.2866
Strategy: Whilst above the weekly trend reversal level,buy dips to supportafter 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 1.3600, the multi-year high, and possibly higher still, towards 1.4100.
Today:Surprisingly docile compared to its counterparts yesterday, the euro ended up moving 20 pips higher by the end of the day, so very little has changed. No change to the strategy - continue to buy dips, whilst above 1.2860, but be aware that this range will break soon, and it is by no means clear which way. A daily close below 1.2800 will probably lead to a drop to below 1.2700, whereas a close above 1.3050 is needed to send the euro higher towards 1.3150 and then 1.3300.
EUR/USD Hourly chart:

EUR/USD Weekly chart:

GBP/USD
Weekly Trend direction: Bearish
Weekly trend reversal level: 1.9750
Resistance levels: 1.9700, 1.9750
Strategy: Whilst above the weekly trend reversal level, sell rallies to resistance levels after an entry signal.
Medium term: The trend remains bullish whilst above roughly 1.9200, but it is becoming mature and our medium term target is possibly 2.0000. As we approach the BIG figure at 2.0000 and indicators become extremely overbought, great caution is required, as swings both ways may be huge, random and very fast.
Today: The large move came as expected, and the pound plunged almost 200 pips to 1.9545, a fraction below trend line support, but just reaching the previous daily low from the end of January. A small "spike low" on hourly charts and a classical G7 entry ( www.forex-science.com ) makes it quite likely that we have a new bottom in place, but we can't rule out a test of 1.9500, and even 1.9400 next week before we move higher again. For today, hold longs from around the 1.9570 mark, with stops below 1.9540. Be ready to re-buy on a further drop to above mentioned levels - only on signs of basing. There is no sense in trying to "catch a falling knife", especially when the pound is in a nasty mood!
GBP/USD Hourly chart: