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Euro makes a "full stop"?

Daily Currency report for Tuesday October 10 2006

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
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Date ET Release For Actual Briefing.com Consensus Prior Revised From
Oct 10 00:00 Treasury Budget Sep (TBA) $55.0B $45.0B $35.7B
Oct 10 10:00 Wholesale Inventories Aug 0.8% 0.6% 0.8%
Oct 11 10:30 Crude Inventories 10/06 NA NA 3355K
Oct 11 14:00 FOMC Minutes Sep 20
Oct 12 08:30 Initial Claims 10/07 310K 312K 302K
Oct 12 08:30 Trade Balance Aug -$66.0B -$66.5B -$68.0B
Oct 12 14:00 Fed's Beige Book
Oct 13 08:30 Export Prices ex-ag. Sep NA NA 0.4%
Oct 13 08:30 Import Prices ex-oil Sep NA NA 0.5%
Oct 13 08:30 Retail Sales Sep 0.1% 0.2% 0.2%
Oct 13 08:30 Retail Sales ex-auto Sep -0.1% 0.0% 0.2%
Oct 13 09:50 Mich Sentiment-Prel. Oct 86.0 86.0 85.4
Oct 13 10:00 Business Inventories Aug 0.6% 0.5% 0.6%

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EUR/USD

Weekly Trend direction: Bearish

Weekly trend reversal level: 1.2780

S/R levels: 1.2670 - 1.2700

Strategy: Whilst above the weekly trend reversal level, sell rallies to resistance levels after an entry signal.

Medium term: The Euro has dropped below immediate support at 1.2670, but remains in the broader 1.2450 - 1.2950 range which has dominated since June. This means range trading should continue until the Euro breaks out one way or the other.

Today: A tiny range yesterday means we might just have a "full stop" at the bottom of last week's decline. The Euro has dropped below weekly support and momentum has turned bearish. Whilst support at 1.2570 should hold in the early part of the week, rallies to 1.2670/1.2730 are opportunities to sell euros for another test of last weeks lows. Only a rally above 1.2730 and the weekly high at 1.2770 will turn the euro bullish.

EUR/USD Hourly chart:



EUR/USD Weekly chart: