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Daily Technical Strategist

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GBPUSD: Rejection Of Lower Prices Turns Risk Higher

Wed, Nov 4 2009, 11:47 GMT
by Mohammed Isah

FXTechstrategy

HIGHLIGHTS:

GBPUSD: Rejection Of Lower Prices Turns Risk Higher - A reversal of intra day losses on Tuesday saw GBP closing marginally higher at 1.6420 and was seen following through higher in early trading...

EURUSD: Backs Off Lower Price With Caution - Having continued to maintain is corrective weakness triggered at the 1.5062 level, EUR weakened to as low as 1.4625 …

GBPUSD

GBPUSD: Rejection Of Lower Prices Turns Risk Higher

GBPUSD - A reversal of intra day losses on Tuesday saw GBP closing marginally higher at 1.6420 and was seen following through higher in early trading today. While the pair is short term vulnerable to the downside, with its current price development, risk is now beginning to shape up with eyes on the 1.6602 level, its Oct 29’09 high. On a clean invalidation of there further upside gains is likely towards the 1.6692 level, its Oct 23’09 high which must give way to relief the pair of its ST downtrend vulnerability and open the door for further higher prices towards the 1.6740 level, its Sept 11’09 high with an eventual loss of there setting the stage for a retarget of its YTD high at 1.7041. Beyond the latter will activate the resumption of its medium term uptrend on hold since Aug’09. We are cautious of our upside outlook for the pair nearer term as two resistance levels(1.6602 and 1.6692) must be broken to keep that view valid. On the other hand, supports are located at the 1.6366 level and the 1.6260 level, its Nov 03’09 low with a break targeting its Oct 30’09 high at 1.6124 level and then the 1.6000 level. Its daily stochasticsremains supportive of this view. On the whole, with rejection of lower level prices and a higher close seen, risk remains higher nearer term.

EURUSD

EURUSD: Backs Off Lower Price With Caution

EURUSD - Having continued to maintain is corrective weakness triggered at the 1.5062 level, EUR weakened to as low as 1.4625 on Tuesday before bouncing off that low to close marginally lower at 1.4731. With a rejection candle now in place, the pair could be preparing to trade higher. In such a case, its Nov 02’09 high at 1.4844 level will be aimed at with a loss of there allowing the EUR to strengthen further towards the 1.5000 level and then its YTD high at 1.5062 with a loss of there triggering the resumption of its medium term uptrend now on hold. We still retain our bearish outlook nearer term on the pair unless a break and hold above the 1.4844 level occurs. Initial support lies at the 1.4625 level ahead of its MT rising trendlinecurrently at 1.4593 where we expect a cap but if that fails to materialize, price acceleration should shape towards the 1.4479 level, its Oct 02’09 low. On the whole, though vulnerable to the downside, EUR looks to build on its rejection candle printed on Tuesday.

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Published on  Wed, Nov 4 2009, 11:59 GMT