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Daily Technical Strategist

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GBPUSD: Loses Upside Momentum, Faces Downside Weakness

Thu, Jul 2 2009, 12:42 GMT
by Mohammed Isah

FXTechstrategy

HIGHLIGHTS:

EURUSD: Turning Off Bullish Incursions -Although strength saw the pair closing strongly higher on Wednesday, an attempt on a break of its key resistance at the 1.4177 level, its Jun 11'09 high failed suggesting the mentioned upmovemay not be sustainable.

GBPUSD: Loses Upside Momentum, Faces Downside Weakness -With upside price failure on Tuesday forming a shooting candle pattern and putting the pair back into its sideways trading range, outlook for GBP remains to the downside nearer term while that pattern holds.

EURUSD

EURUSD: Turning Off Bullish Incursions

EURUSD-Although strength saw the pair closing strongly higher on Wednesday, an attempt on a break of its key resistance at the 1.4177 level, its Jun 11'09 high failed suggesting the mentioned upmovemay not be sustainable. However, if a follow through higher occurs and a turn above the 1.4177 level is seen, further price incursion should shape towards the its YTD high at 1.4339.Above there will resume its medium term uptrend towards the 1.4719 level, its Dec 18’08 high and possibly higher targeting the 1.4867 level, its Sept 22’08 high. Its daily studies are positive and pointing higher suggesting further strength. On the other hand, if price failure at the 1.4177 level forces EUR lower, its Jun 29’09 low residing at 1.3981 level will be targeted ahead of the 1.3826 level, its Jun 22’09 low with a clearance of the latter highlighting the 1.3738 level, its Mar 19’09 high where a cap is expected. Breaking and closing below there will turn focus to the 1.3618 level, its weekly 200 ema.On the whole, having halted its declines off the 1.4339 level and broken above its declining channel, risks remain to the upside towards the 1.4177 level.

GBPUSD

GBPUSD: Loses Upside Momentum, Faces Downside Weakness.

GBPUSD: With upside price failure on Tuesday forming a shooting candle pattern and putting the pair back into its sideways trading range, outlook for GBP remains to the downside nearer term while that pattern holds. In corroborating this view, the pair was seen weakening early trading today. Although a flat price action on Wednesday prevented a follow through lower on the formation of the mentioned shooting star, GBP still remains vulnerable as long as the 1.6427 level, its Jun 29’09 low holds as resistance. Support is initially seen at the 1.6209 level, its Jun 16’09 low followed by the 1.6000 level, its psycho level ahead of the 1.5801 level, its Jun 08’09 low. The last two levels are expected to reverse roles and provide support if tested. Its daily RSI Remains supportive of this view as it is heading to the downside. On the upside, a close back above the 1.6662 and 1.6742 levels must occur to halt its negative nearer term outlook and resume its medium term uptrend towards the 1.7000 level, its psycho level and possibly higher. All in all, with a failure on upside attempts and a return back into its sideways trading range seen, break out of that range is required to create meaningful directional moves.

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Published on  Thu, Jul 2 2009, 12:49 GMT