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Euro shows some teeth

Daily Currency report for Friday October 27 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 25 10:00 Existing Home Sales Sep 6.35M 6.25M 6.30M
Oct 25 10:30 Crude Inventories 10/20 NA NA 5020K
Oct 25 14:15 FOMC policy statement
Oct 26 08:30 Durable Orders Sep 4.5% 2.3% 0.0%
Oct 26 08:30 Initial Claims 10/21 310K 308K 299K
Oct 26 10:00 Help-Wanted Index Sep 31 31 31
Oct 26 10:00 New Home Sales Sep 1030K 1050K 1050K
Oct 27 08:30 GDP-Adv. Q3 2.0% 2.1% 2.6%
Oct 27 08:30 Chain Deflator-Adv. Q3 2.8% 2.9% 3.3%
Oct 27 09:50 Mich Sentiment-Rev. Oct 92.3 92.5 92.3

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EUR/USD

Weekly Trend direction: Bullish

Weekly trend reversal level: 1.2480

Support levels: 1.2580-1.2620

Strategy: Whilst above the weekly trend reversal level, buy dips to support 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: First target of 1.2700 has been reached in the cleanest price action we have seen for weeks. The euro will probably consolidate between 1.2700 and 1.2750, perhaps dropping back to the 1.2600's before a new rally. Dips continue to be an opportunity to buy, with support rising up from 1.2600 at the present time.

EUR/USD Hourly chart:



EUR/USD Weekly chart: