Archived IMT (2010.10.12)

EURUSD BREAKS BELOW 4-WEEK TRENDLINE SUPPORT of $1.3850, a NY close below which would extend losses to $1.37. The stochastics validation for further decline is in place. Now that the 200-week MA and 61.8% retracements at $1.3920 were both attained, this may be the time to take profits and extend losses towards possibly $1.36. Do not forget that EURUSD had 4 consecutive weekly gains (longest winning streak since Jul/August) and a correction is overdue. UK Sep CPI held at 3.1% y/y while the core slipped to 2.7% from 2.8%/ Sterling being hit by escalating demands for additional QE from the business community. GBPUSD continues to look like a double top from the Aug high of $1.5997 high and $1.57 appears a decent prelim target (trendline from Sep 9). GBPCAD eyes 1.6020.