HIGHLIGHTS:

EURUSD: Nearer Term Recovery Sees Further Upside Gains- EUR’s rise off the 1.3313 level, its Jan 06’09 low built more upside momentum Thursday maintaining a second day of higher gains to close at 1.3698...

GBPUSD: GBP Maintains Recovery Momentum- GBP continues to gain further upside momentum closing higher for a third day in a row since rising off the 1.4378 low on Jan’02’09…

EURUSD: Nearer Term Recovery Sees Further Upside Gains.

EURUSD: EUR’s rise off the 1.3313 level, its Jan 06’09 low built more upside momentum Thursday maintaining a second day of higher gains to close at 1.3698.The pair’s short term upside embarked upon from the 1.2330 has halted and as long as the 1.4363 level, its Dec 29’08 high remains resistance, we envisage further downside losses through the 1.3298 level, its Dec 11’08 high/former range top with the next support residing at its .618 Fib Ret (1.2330-1.4719 rally)support at 1.3244 and then its Nov 25’08 high at 1.3081.On the contrary, a break and hold above 1.4363 level must occur to reduce the current downside threat and bring further upside gains towards the 1.4719 level, its Dec 18’08 high. We retain our medium term bearish tone on the pair despite its recent upside incursions(ST) and see a return to the 1.2330 level and possibly beyond. On the whole, its decline off the 1.4719 level remains consistent with its MT downtrend now on hold.

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