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Daily Technical Strategist

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GBPUSD: Struggling At The Channel Top

Thu, Oct 29 2009, 12:11 GMT
by Mohammed Isah

FXTechstrategy

HIGHLIGHTS:

GBPUSD: Struggling At The Channel Top - GBP continues to struggle slightly above its declining channel following its marginal lower close on Thursday.

EURUSD: Trades Below 1.4844, Sees Further Downside Momentum - Extension of losses following the pair’s collapse off the 1.5062 level was.

GBPUSD

GBPUSD: Struggling At The Channel Top.

GBPUSD - GBP continues to struggle slightly above its declining channel following its marginal lower close on Thursday. To alleviate its current threat to the downside, the pair must climb back above the 1.6692 level, its Oct 23’09 high to signal further upside towards the 1.6740 level, its Sept 11’09 highwhere a break higher will pave the way for a run at its YTD high at 1.7041. We retain our short term downtrend outlook on the pair while trading below the 1.6692 level. In such a case, immediate support lies at the 1.6358 level followed by the 1.6239 level where its Oct 19’09 low is located ahead of its Sept 30’09 high at 1.6124 with a break creating scope for further weakness towards the 1.5708 level printed on Oct 13’09. Below the latter will set off the resumption of its short term downtrend. On the whole, GBP must break and hold above the 1.6692 level to reverse its current downside threats.

EURUSD

EURUSD: Trades Below 1.4844, Sees Further Downside Momentum

EURUSD - Extension of losses following the pair’s collapse off the 1.5062 level was seen Thursday pushing EUR to as low as 1.4690. It was seen turning off lower prices today. Vulnerability to the downside still remains on the cards with lower level prices targeting the 1.4699 level, its daily 50 emaand its Oct 09’09 low at 1.4672. Its current weakness is coming on the back of its medium term run off the 1.2456 level to as high as the 1.5062 and with corrective declines triggered, an eventual loss of the 1.4699/72 levels could portend danger towards its LT trendlineat 1.4556. We envisage this level if seen should cap declines and push the pair back up. The daily studies are bearish and pointing lower suggesting further weakness. However, break back above the 1.4844 level is required to reduce the current downside pressure and bring further gains towards its psycho level at the 1.5000 level with a breach exposing its YTD high at 1.5062. Beyond there will trigger the resumption of its medium term uptrend. On the whole, risk remains lower nearer term having collapsed through the 1.4844 level though seen turning off lower prices in early trading today.

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Published on  Thu, Oct 29 2009, 12:18 GMT