HIGHLIGHTS:

EURUSD: Triangle Downside Resolution Keeps Pressure On The 1.2330 With continued decline off the 1.3298 high and a print of a new low at 1.2477 following a break out of its 4 hourly triangle , EUR is now set to weaken further towards its YTD low at 1.2330..

GBPUSD: GBP Poised To Invalidate The 1.5265 Low - A sharp sell off Tuesday has increased the risk of a decline towards GBP’s YTD low at 1.5265 and possibly lower …

Triangle Downside Resolution Keeps Pressure On The 1.2330 Level. EURUSD: With continued decline off the 1.3298 high and a print of a new low at 1.2477 following a break out of its 4 hourly triangle , EUR is now set to weaken further towards its YTD low at 1.2330.We maintain our medium term outlook for weakness through this level accelerating towards the 1.2134 level, its .50 Ret (its 0.8231-1.6038 high, monthly chart) with price extension aiming at the 1.1827 level, its Mar’06 low and ultimately its Nov’05 low at 1.1640.The daily RSI and Stochastics are in alignment with this view as they are both heading lower.Alternatively,if any form of recovery occurs at this stage, the 1.2728 level, its Oct 22’08 low will be targeted ahead of the 1.3058/05 level, its Oct 23’06 high/.618 Ret (0.8231-1.6038 rally, monthly chart) along with the 1.3259/98 level, its Oct 30’08 high/Oct 10’08 low and then the 1.3666 level, its Dec’04 high. On the whole, having broken out of its symmetrical triangle, EUR should aim at the 1.2330 level and beyond.

Support          Comments

1.2484           Oct’06 low

1.2330/24      Oct 28’08 low/Jan/April’06 highs

1.1827           Mar’06 low

Resistance      Comments

1.2728           Oct 22’08 low

1.2866           Jan’07 low

1.3058/05      Oct 23’06 high/.618 Ret (0.8231-1.6038 rally, monthly chart)

1.3259/98      Oct 30’08 high/Oct 10’08 low