Eur/Usd: 25Nov03 1917EST 1.1783-88

Daily - the up-move managed a high of 1.1975-80 before reversing sharply. We were surprised with the quick turn around which has resulted in the Daily Oschist crossing below 0. This is an indication that the immediate risk is on the downside but with Acchist still holding above 0 (albeit weakly), we are unsure whether this turn around is an indication of a significant top or just a deeper downward correction before moving higher again later on. Only a clean break below 1.1600 will indicate that 1.1975-80 is a significant top. In the meanwhile, expect sideway trades between 1.1600 and 1.1930.

Hourly - The high 3-hour Cycle highlighted in the previous update resulted in an unexpected sharp sell-off. The Hourly Cycle remains near the low for an uncharacteristically long period of time. A failure OHCR Buy was triggered last Friday but this was not surprising in view of the non-Impulsive move then and the close proximity of the Env-top (see Hourly Chart1 below). Due to the prolonged sideway consolidation, a NESU Sell was actually triggered when the Envelope narrowed considerably but we were unprepared for the sharp sell-off.

With the averages of MP1 crossing over fully to the upside, it is likely that we have seen a temporary low at 1.1750-55. In fact, an OHCR Buy was triggered during NY session but any up-move from here is considered corrective at this juncture with resistance at the Env-mid (1.1815) and a likely correction target at the Qrt Env-top (significant level as coincides with Mid-line at 1.1865). Currently we do not expect a move above the Env-top at 1.1925 (coincides with Top-line).

Strategy:

Daily
- Sidelined.

Hourly - Cycle is near the low and OHCR was triggered with stop below 1.1750. However, we consider any up-move as corrective in nature and with a rather moderate `target` at 1.1865, we favor waiting for Cycle to top and monitor for sell set-up (may take 24 hours or more). In view of the still unclear Daily view, we would not be surprised if we trade in sideway manner from here.