Week of September 5-10, 2010

EURUSD’s broad outlook continues to favor further downside risk with the fall from the November 2009 high of 1.5143 remaining active as ONLY a weekly open and close above 1.3124 will complete the fall while the June 2010 low of 1.1876 holds. However, the corrective rise from 1.1876 is complete at 1.3332 as prices have opened and closed below 1.2776 both on a weekly and daily basis subsequent to achieving the 1.3332 high.  As to the downside extension from 1.3332, prices have reached a low of 1.2586 as this wave from 1.3332-1.2586 will ONLY be complete with a daily open and close above 1.2871 with potential for further rise targeting 1.3047.  For the week ahead, while daily prices remain above 1.2776, look for further rise towards 1.2959 followed by 1.3047 before a another attempt to the downside.  However,  a sustained break of 1.3124 to the upside and 1.2600 to the dowside will favor further price extension in the direction of the break.