HIGHLIGHTS:

EURUSD: Corrective Decline Sees Respite At The 1.3298 Level-A follow-through to the downside on its recent decline started at 1.4719(Dec 18’08) took a breather Tuesday halting at the 1.3298 level, its Dec 11’08 high/former range top to close the session at 1.3505...

GBPUSD: Maintains Its Consolidation To Corrective Mode-The pair remains biased to the downside in the short, medium and long terms suggesting that any strength seen is corrective and should fade turning GBP lower again …

EURUSD: Corrective Decline Sees Respite At The 1.3298 Level.

EURUSD: A follow-through to the downside on its recent decline started at 1.4719(Dec 18’08) took a breather Tuesday halting at the 1.3298 level, its Dec 11’08 high/former range top to close the session at 1.3505.A lower shadow rejection candle is now in place(a sign of a temporary halt in price decline).Pressure however remains to the downside with a decisive break and hold below the 1.3298 level paving the way for a run at its .618 Fib Ret (1.2330-1.4719 rally)support at 1.3244. Further out, support are situated at its Nov 25’08 high at 1.3081 and its Dec 04’08 at 1.2848.Odds for additional downside pressure is clearly supported by the loss of the 1.3828 swing low after a failure at the 1.3919 level smashed EUR through the said level creating a reversal price picture. Recovery higher if seen is expected to challenge the 1.3785 level, its Oct 09’08 high initially and then the 1.3882 area, its Sept 11’08 high. On the whole, we retain our bearish medium term and nearer term outlooks and see any recovery higher as temporary.

Support        Comments

1.3531          Oct 20’08 high

1.3298          Dec 11’08 high/former range top

1.3244          .618 Fib Ret (1.2330-1.4719 rally)

Resistance         Comments

1.3785                 Oct 09’08 high

1.3882/1.3900     Sept 11’08 high/.618 Ret.

1.4363                 Dec 29’08 high