Week of May 11, 2009

EURUSD’s rise from the May 7, 2009 low of 1.3251 remains active as a daily open and close below 1.3506 will complete this rise while today’s 1.3664 high holds, as prices will then continue to move within a 1.3409-1.3506 consolidation zone before another attempt to the upside. Additionally, last Friday’s daily and weekly close above the 200 day moving average favors further price extension to the upside while daily prices remain above the 200 day MA currently at 1.3456 as of this writing. As to the downside, a sustained move below 1.3409 will see further price extension to the downside with 1.3251 as the initial target. For the session ahead, look to buy EURUSD at 1.3506, stop loss below 1.3450 for 1.3884 initial target.

GBPUSD dramatic rise from the April 22, 2009 low of 1.4396 has reached 1.5352 and remains active as ONLY a daily open and close below 1.4987 will complete this rise with prices then moving continuing to move lower within a 1.4761-1.4987 consolidation zone before another attempt to the upside. However, trendline support from the April 28, 2009 low of 1.4515 has limited the downside during the above mentioned rise as prices have moved below this trendline during today’s European session. Look for a retest of this former trendline support now resistance which comes in at 1.5160 as of this writing.  Failure to move back above this trendline would suggest prices will continue to move lower with 1.4987 as the next objective.

DJIA- The Dow Jones Industrial Average corrective rise from the from the March 5, 2009 low of 6469 remains active as ONLY a daily open and close below 7,778 will complete this rise while the May 5, 2009 high at 8587 holds. As to the broad outlook, the fall from the March 2008 high of 13,141 remains active as ONLY a weekly open and close above 9015 will complete this fall with prices then continuing to move higher within a  9015-10,591 consolidation zone before another attempt to the downside. Additionally, once prices sustain above 9015, this will be a good indicator that global economic recovery has sustained with risk for further GDP growth outweighing any potential decline.