FOREX EUR/USD 4th July 2008

Euro Daily and 3-day pattern

Euro reversed down from the Weekly and Thursday's highs, and has moved back down into July's 50% level. This was the pattern I was looking for on Wednesday.

On Thursday, my view was price was going to come back down and test the 5-day 50% level, but only then if support was verified would an UP move occur on Friday.

It's obvious now that the 5-day 50% level didn't hold and Thursday's support (lows) has broken, and as previously mentioned this week, a break of support and expectation of a lower Weekly close by Friday.

However like all breakouts:- price will normally come back and re-test the 5-day 50% level before the trend continues.

Once again Friday's ranges are the 5-day 50% level and Friday's lows

Note:- It's important on the direction of the Euro in July that any UP trend is going to continue if prices remain above the July 50% level, which is often is the case when prices on the weekly timeframe come down and close lower , and then price moves higher from a lower weekly open the following next week, as price rises up from support.

Therefore this rotating down on Thursday isn't an unexpected move in the first week of July, but it's Friday's close that is the important part of this reversal down.

Weekly Report tomorrow

• All Daily forex reports are written before 9.00am Sydney Time, which is approximately 3 hours before Midnight GM

Exact levels shown for current day aren't confirmed until midnight GM