The EURUSD remains in a shallow downward channel this week. The price tested the 100 hour MA (blue line in the chart below) and trendline earlier today - providing a low risk trading opportunity (see hourly chart below). The pair has resumed the move lower and looks to target the 1.3040 level where the bottom of the channel currently comes in.

Taking a look at the daily chart below, the price has moved back below the key 200 day MA (green line in the chart below) currently at the 1.3091 area and also has moved below the 50% retracement of the move up from the 2010 low at 1.1876 to the high reached in November at 1.4281. That level comes in at 1.30785. Staying below this level today should keep the pressure on the pair and would target in the medium term a testing of the 1.2968 low for November and possibly the 61.8% retracement at the 1.2795 level.

For today, a move back above the 1.30785 level (50%) should solicit some holiday type profit taking by the day traders, with a move above the 200 day moving average, taking all the wind out of the bears sails.

1. “Spain is not Greece.”
Elena Salgado, Spanish Finance minister, Feb. 2010

2. “Portugal is not Greece.” 
The Economist, 22nd April 2010.

3. “Ireland is not in ‘Greek Territory.’”
Irish Finance Minister Brian Lenihan.

4. “Greece is not Ireland.”
George Papaconstantinou, Greek Finance minister, 8th November, 2010.

5. “Spain is neither Ireland nor Portugal.”
Elena Salgado, Spanish Finance minister, 16 November 2010.

6. “Neither Spain nor Portugal is Ireland.”
Angel Gurria, Secretary-general OECD, 18th November, 2010.

I’ve just been asked why the stock market has been rallying in recent weeks despite the concerns over Europe, etc.

Two reasons, in my view.

The first is liquidity. The Fed is purposely flooding money into the banking system trying to push investors out of interest-bearing instruments and into riskier assets. On that score they have been fabulously successful…

The second factor is that equities are under-owned as an asset class compared to historical norms. Until very recently, bonds were over-owned to an extent never before seen. The bond bubble looks to have burst and investors have moved money back into equities.

I don’t see either of these factors changing dramatically in the next few months…

http://www.forexlive.com/

The target for this type of setup comes from measuring the height of the pattern and extrapolating that out from the breakout point. Theprofit target can be a fixed target or the trader may decide instead totighten and then trail their stop once this level has been reached.

Here's Chris Kimble's analysis:

Chris comments: We all know Crude oil has a large impact on our lives. Currently Crude oil is waging war with the 50% Fibonacciresistance level at $90.
In April Crude came within $2 of the 50% level and declined, as stocks were peaking at the same time.
Should crude succeed at breaking above the 50% level, the 61% level comes into play around $105!
In 2007 Crude almost went vertical in price and stocks went south, so watch crude closely right now!

Scrat's comments's: One must consider how far we've come from the lows of march 2009,a bit too fast for me,with every analyst out there screaming the sky is the limit again.I believe it can only get higher moderatly.My charts are telling me,this market is ripe for a pullback,but not without a fight.

After WTI passed the $90 barrier with firm determination, as we highlighted earlier, the most recent DOE Crude Oil Inventories numberconfirms that the far larger than expected draw down is accelerating. Asreaders will recall,after last week's massive drawdown of 9.854 million barrels which wasthe largest in 9 years, today's number was another stunner, coming in at5.333 MM on expectations of 3.4 MM. The result: WTI spikes and is lastseen at $90.64. And as a reminder every $1 rise in oil decreases U.S.GDP by $100 billion per year and every 1 cent increase ingasoline decreases U.S. consumer disposable income by about $600 millionper year. The move in oil in the past week alone has almost entirelywiped out the most recent stimulus. Furthermore, as we suggestearlier, now that $90 is in the history books, $100 is coming, and maybe here within a few weeks. At that point Bernanke may have someproblems explaining how he is "100% confident" that the surge ingasoline prices is completely and totally not as a result of hisderanged genocidal tendencies.Don't worry though, hedge fund managersaround the world will be more than happy to afford the surging prices.Remember: wealth effect!

• IMF announces it has concluded its gold sales (IMF)
• Euro helped by report China will buy Portugal's debt (Reuters)
• Huge South Korea Drill Likely to Infuriate North (Reuters)
• And wristslaps for all: Deutsche Bank to Pay $554 Million in Tax Shelter Case (Bloomberg)
• Another proposal to use a firehose to kill those pesky CDS speculators: Derivative Blitz Needed to Tame Anarchic Bonds (Bloomberg)
• China Inflation Risk Leads to Asia's Worst Bond Returns (Bloomberg)
• Does a Low VIX Signal Danger? (Barrons)
• Anglo Irish Bank Wins Restructuring Support (FT)
• Banks Best Basel as Regulators Dilute Capital Rules (Bloomberg)
• The eurozone needs more than discipline from Germany (FT)
• When fat cats talk . . . Team O listens -- at last (Gasparino)
• Chrysler Financial Value Jumped 33% After Treasury's Exit (Bloomberg)
• China's Risk-Weighting Rule May Cut Banks' Capital, Profits, Barclays Says (Bloomberg)

Economic Highlights

• Germany Import Price Index for November 1.2% m/m 10.0% y/y higher than expectedConsensus 0.5% m/m 9.3% y/y Previous -0.2% m/m 9.2% y/y.
• Italy Consumer Confidence Ind. sa for December 109.10 higher than expected Consensus 108.3 Previous 108.5.
• Sweden PPI for November 0.8% m/m 2.20% y/y higher than expected Consensus 0.3% m/m 1.7% y/y Previous -0.7% m/m 2.3% y/y.
• Norway Unemployment rate(AKU) for October 3.6% higher than expected Consensus 3.5% Previous 3.5%.
• UK Total Business Investment for Q3 3.1% q/q 8.9% y/y higher than expectedConsensus -0.2% q/q 4.6% y/y Previous -0.2% q/q 4.6% y/y.
• UK GDP for Q3 0.7% q/q 2.7% y/y lower than expected Consensus 0.8% q/q 2.8% q/q Previous 0.8% q/q 2.8% q/q.
• UK Current Account (BP) for Q3 -9.6B lower than expected Consensus -8.5B Previous -7.4B.

And while the index topped in early September following a brief and uninspired climb, it has since been a one way downward pointing slope. Whether the BDIY is a leading indicator to anything is debatable: some
believe it is a completely irrelevant indicator. Others disagree. A very
strong case for the former camp was made last week by Nordea which
demonstrated,In this Chart:

the average speed of its vessel fleet. One thing is certain: for whatever reason, demand for trans-Pacific cargo shipments is once again plunging.

Nordea's Comments:We have understood that Chinese cargo ships have been told to proceed at 'wind speed', because of a collapse in US import demand - this is partly visible in the activity amongst Long Beaches shoremen - hence, is this the final proof that the inventory rebuild that drove the
recovery in the autumn is OVER? Figure 1 shows the average speed
amongst bulk carriers! Bulls - Watch Out!