Forex daily analysis: 25-10-2010

Daily graph:

About a week ago, the pair started to increase after a long bearish trend. During this increase, a resistance at 0.9727 has been crossed, confirming the uptrend started. The strength of last week’s candles suggests that the bulls may still winning against the bears for quite a long period.
Our analyses estimate the pair will correct 33% of the previous downtrend until the next resistance at 0.9906 and may even break it.
An opportunity for a “Long” trade may be created by the identification of an increasing configuration on One-Hour graph.
Potential trade
One Hour graph:

Our analysts estimate the creation of the required configuration once the resistance (ONE HOUR graph resistance) of 0.9804 will be broken. Our analysts’ transaction:
·        “Limit Order” on “Long” position 10 pips above the given resistance, meaning 0.9814.
·        “Stop Loss” order on the last low reached: 0.9777
·        “Take Profit” on the following daily resistance: 0.9906
Daily graph:

Once the resistance 0.7625 reached, the pair decreased for a few sessions but was stopped by the support 0.7425. Actually, the pair is based above the support, and until now, didn’t success in breaking that support.
This stop suggests a reversing trend very soon, which should continue until the resistance 0.7550 and even higher, opening the opportunity to trade “Long”.  Two options may confirm this new trend:
1.     A vain breach of the daily support: 0.7425
2.     On one-Hour graph, the identification on an increasing configuration.
Have a profitable day!
Real-Forex team.