HIGHLIGHTS:

EURUSD: Trades Above Its Declining Channel Top- A hammer follow through saw the pair breaking back above its Jan 15’09 low at 1.3026 and its Nov 25’08 high at 1.3081 on Monday to close higher at 1.3186... Learn more

EURJPY: Range Trading Environment Shapes Up - Failure at its YTD low at 112.09 and a return back above the 113.63 level, its Oct 27’08 low and its Dec 05’08 low at 115.88 has now increased the odds of  higher prices within its developing sideways trading environment… Learn more

EURUSD: Trades Above Its Declining Channel Top

EURUSD: A hammer follow through saw the pair breaking back above its Jan 15’09 low at 1.3026 and its Nov 25’08 high at 1.3081 on Monday to close higher at 1.3186.EURUSD was seen cutting through its declining daily channel in early morning trading today with hold on those gains opening up upside risk towards the 1.3298/1.3313 zone, its Jan 06’09 low/Oct 30’08 high. A cap is expected at this zone to turn the pair lower again but if that fails to materialize, the 1.3531 level, its Oct 20’08 high will serve as the next upside target. Its daily studies which are bullish and trending higher are supportive of this view. On the downside, the lost levels at its Nov 25’08 high at 1.3081 and its Jan 15’09 low at 1.3026 will come in as supports with a break and close below there bringing the pair back for a fresh challenge on the 1.2766 level, its Jan 23’09 low. Below there will put the pair on path for price extension towards the 1.2551 levels, its Dec 04’08 low with bigger support standing at the 1.2330 level, its 2008 low. On the whole, while present price action remains corrective of its declines from the 1.4719 level, holding off upside gains at the 1.3298/1.3313 zone is expected to turn the pair lower.

Support     Comments

1.3081      Nov 25’08 high

1.2848      Dec 04’08 high

1.2551      Dec 04’08 low

Resistance       Comments

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

1.3531               Oct 20’08 high

1.3799               Jan 08’09