Updating time : 02/11/2007 00:19 GMT

EUR/USD - 1.4426...The single currency declined in European morning y'day to 1.4404 due to cross selling in euro esp vs sterling n chf b4 briefly recovering to 1.4479 in U.S. session, however, unwinding in eur/jpy on risk aversion due to the selloff in U.S. stocks pressured price again in NY afternoon.

Y'day's fall to 1.4404 indicates recent upmove has indeed formed a temp. top earlier this week at 1.4508 n as long as o/n NY high at 1.4479 holds, consolidation with downside bias remains for another corrective decline, below 1.4404 wud encourage for further weakness twds 1.4374/86 (sup n 38.2% r of intermediate rise fm 1.4188-1.4508), however, below 1.4348/49 (50% r n prev. res) is needed to retain bearishness for stronger retracement to 1.4317/20 (38.2% r of 1.4015-1.4508 n 50% r of 1.4126-1.4508). Therefore, trading fm short side is favoured but readers shud look to take profit once price penetrates 1.4404 (important U.S. employment data is due out later today at 12:30GMT).

Abv 1.4479 risks possible re-test of 1.4508 top, break wud extend uptrend to 1.4525/30 but 1.4585 (61.8% proj. of 1.3360-1.4283 fm 1.4015) shud cap upside.

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