Week of March 30, 2009

EURUSD intraday fall from Friday’s 1.3591 high has reached 1.3181 during today’s Asia session, with a daily close below 1.3248 today confirming the corrective rise from the March 4, 2009 low of 1.2455 is complete at the March 19, 2009 high of 1.3591. A daily close today below 1.3248 will see prices continue to move lower within a 1.2945-1.3248 consolidation zone before another attempt to the upside. As to the intraday fall from Friday’s 1.3591 high, this wave remains active as ONLY a daily close above 1.3338 will complete this fall while today’s current low of 1.3181 holds, as prices will then move within a 1.3338-1.3434 consolidation zone. Once prices have entered into the consolidation zone, any sustained break outside the zone will see further price extension in the direction of the break.  For the session ahead, look for intraday prices to continue to move while 1.3338 caps, with 1.3097 as the next objective.

GBPUSD corrective rise from the March 11, 2009 low of 1.3653 will be complete at the March 24, 2009 high of 1.4776 with a daily close today below 1.4347, as prices will continue to move lower within a 1.4082-1.4347 consolidation zone before another attempt to the upside. Once prices have closed within the above mentioned zone, any sustained break such as a daily close outside the zone will see further price extension in the direction of the break. As to the intraday fall from Friday’s 1.4493 high, this wave remains active as ONLY a daily close above 1.4288 will complete this fall. No change in the medium term outlook, as the impulsive wave from the September 25, 2008 high of 1.8666 remains active with a daily open and close above 1.5475 completing the fall at the January 23, 2009 low of 1.3502.  For the session ahead, look for GBPUSD to continue to move lower towards 1.4082 while intraday prices should remain below 1.4212.

XAUUSD remains offered intraday while the broad outlook for Gold remains bid. Trendline support from the October 2008 low of 680.95 comes in around 920 today, while this rise from 680.85 remains active until a daily open and close below 881.74.  As mentioned in the March 17, 2009 update, support at 881.74 look remains firm as ONLY a daily open and close below this level will see prices continue to correct lower within a 805.03-881.71 consolidation zone before another attempt to the upside. Again, once prices have close within the above mentioned zone, a daily open and close outside the zone will see further price extention in the direction of the break.

DJIA corrective rise from the March 6, 2009 low of 6,470.15 remains active as ONLY a daily open and close below 7,373.06 will complete this rise while the March 25, 2009 high of 7,931.17 holds. In our March 10, 2009 update, we stated that a daily open and close above 7,147.78 will complete the fall from the February 6, 2009 high of 8,315.07 at the March 6, 2009 low of 6,469.95 as prices would then continue to move higher within a 7147-7610 zone before another attempt to the downside, however, a sustained break of this zone would see further price extension in the direction of the break. Our outlook proved to be spot on as once daily prices opened and closed above 7147, further extension to the upside unfolded eventually reaching 7,931. As to the broad outlook, the fall from the April 2008 high of 13,141 remians firmly to the downside as ONLY a weekly open and close above 9,015.5 will complete this fall with prices subsequently moving within a 9015-10.591 consolidation zone before another attempt to the downside.