EUR/USD Weekly Technical Report 8-12/10/2012

The interim uptrend has ended with a spinning top candlestick pattern on Friday after experiencing a new resistance line of a potential descending channel as seen on the provided daily graph. Placing a lower top in addition to the bearish tendencies seen ahead of the closing of the previous week argue us to suggest additional bearish momentum. But, we will not join bears unless 61.8% Fibonacci of the entire downside rally from 1.3485 to the significant low of 1.2040 is taken decisively. It is likely that the downside price actions will gain aggressive impetus with another break below 1.2890 aiming to challenge 1.2750-1.2700 regions. Finally, Stochastic is on its way to overlap bearishly to confirm the negativity on MACD traditional.

The trading range for this week is among key support at 1.2700 and key resistance at 1.3280.

The general trend over short term basis is to the   downside   targeting   1.1865   as far as areas of   1.3550   remain intact.

Support    1.2935    1.2890    1.2825    1.2750    1.2700
Resistance    1.3055    1.3080    1.3145    1.3200    1.3250
Recommendation    Based on the charts and explanations above our opinion is, selling the pair below 1.2930 targeting 1.2700 and stop loss above 1.3110 might be appropriate this week.