HIGHLIGHTS:

EURUSD: Break Above Declining Channel Top Turns Focus To The 1.3386 Level- While the 1.3298/1.3313 zone, its Jan 06’09 low/Oct 30’08 high comes in as the immediate resistance as that zone is now under attack, clearing and maintaining above there will bring its Jan 19’09 high at 1.3386 into focus...

USDCAD: Halts Declines But Still Remains Vulnerable- : The pair traded lower intra day Tuesday  touching a low of 1.2153 before reversing those gains to close marginally higher at 1.2249, its first since the beginning of its corrective decline off the 1.2765…

EURUSD: Break Above Declining Channel Top Turns Focus To The 1.3386 Level.

EURUSD: While the 1.3298/1.3313 zone, its Jan 06’09 low/Oct 30’08 high comes in as the immediate resistance as that zone is now under attack, clearing and maintaining above there will bring its Jan 19’09 high at 1.3386 into focus. This current upside incursion is coming on the back of a failure at the 1.2766 and the subsequent formation of a hammer-like rejection candle. The present corrective recovery may challenge additional higher price if the 1.3386 level gives way. In such a case, the 1.3531 level, its Oct 20’08 high and the 1.3799 level. its Jan 08’09 will be seen as the next two chart levels. Momentum indicators remain supportive of this view. We still retain our downside outlook for the pair as this current upside recovery remains corrective of its decline from the 1.4917 level. To the downside, pullbacks should first aim at its Nov 25’08 high at 1.3081 and its Jan 15’09 low at 1.3026 followed by the 1.2766 level, its Jan 23’09 low. Below the latter will call for further downside pressure towards the 1.2551 levels, its Dec 04’08 low and then the 1.2330 level, its 2008 low. On the whole, although nearer term upmove at this stage can not be ruled out, we still see this as corrective of its 1.4719-1.2766 decline.

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

1.3386               Jan 19’09 high

1.3531               Oct 20’08 high