HIGHLIGHTS:

EURUSD: Clears The 1.3081 Level, Opens Up Downside Risk- EUR closed lower Monday wiping out its Friday gains and opening Tuesday trading session on the downside. It was seen trading below its Dec 04’08 low at 1.3081 and its Jan 15’09 low at 1.3026...

GBPUSD: Shooting Star Candle Turns The Pair Lower, Breaks Its YTD Low- GBP tumbled lower Monday following through to the downside on its Friday hammer formation. It closed the session at 1.4473  and was seen selling off strongly in early morning trading today breaking below its YTD low at 1.4352…

EURUSD: Clears The 1.3081 Level, Opens Up Downside Risk.

EURUSD: EUR closed lower Monday wiping out its Friday gains and opening Tuesday trading session on the downside. It was seen trading below its Dec 04’08 low at 1.3081 and its Jan 15’09 low at 1.3026.Trading and maintaining below these levels suggest its return to the 1.2551 level, its Dec 04’08 low and finally its YTD low at 1.2330 are shaping up. We see the loss of the latter activating the resumption of its medium term downtrend on hold since late Oct’09 towards its Feb’06 low at 1.1827.The weekly studies have turned lower supporting this view. On the upside, on any recovery higher from the present price levels, EUR should head towards its just invalidated supports at the 1.3026/80 area where a break if seen will open the door for higher prices towards another strong resistance at the 1.3298/1.3313 zone. The next two upside objectives are positioned at the 1.3531 level, its Oct 20’08 high and the 1.3785 level, its Oct 09’08 high. On the whole, having cleared layers of support level, EUR should now head further lower targeting its YTD low at 1.2330.

Support     Comments

1.2551      Dec 04’08 low

1.2330      YTD low

1.1827      Feb’06 low

Resistance   Comments

1.3081          Nov 25’08 high

1.3298          Dec 11’08 high/former range top

1.3531          Oct 20’08 high