HIGHLIGHTS:

EURUSD: Build Up For A Retest Of The 1.2848 Level & Beyond Seen- As close in on the 1.2848 & the 1.2551 levels, its Dec 04’08 high and Dec 04’08 low continue to build up, EUR looks to retarget its YTD low at the 1.2330 level...

GBPUSD: Invalidation Of The 1.4352/1.4045 Zone Leaves The 1.3682 Level Vulnerable -Having cleanly broken and closed below key supports at its Dec 31’08 low at 1.4352 and its Jan’2002 low at 1.4045,GBP has now opened up downside risk targeting its Jun’2001 low at 1.3682…

EURUSD: Build Up The 1.2848 Level & Beyond Seen.

EURUSD: As close in on the 1.2848 & the 1.2551 levels, its Dec 04’08 high and Dec 04’08 low continue to build up, EUR looks to retarget its YTD low at the 1.2330 level. We maintain our downside bias which is now supported by its broader medium term weakness. Supports are located at the 2848,1.2551 and 1.2330 levels. We see the latter level triggering downside acceleration on a loss of there. Bullish studies though in oversold zone remain supportive of this.However,for any hope of a meaningful recovery to occur, a return above its Jan 15’09 low at 1.3026 and its Nov 25’08 high at 1.3081 will be required. Above here if seen will set the stage for a move towards the 1.3298/1.3313 zone, representing its Jan 06’09 low/Oct 30’08 high where a cap is expected to turn the pair lower again. On the whole,EUR’s downside vulnerability remains in place

Support      Comments

1.2848        Dec 04’08 high

1.2551        Dec 04’08 low

1.2330        YTD low

Resistance       Comments

1.3081               Nov 25’08 high

1.3298/1.3313   Jan 06’09 low/Oct 30’08 high

1.3531              Oct 20’08 high