HIGHLIGHTS:

-EURUSD: Recovery Gains Exposes Channel Top - As recovery initiated at the 1.2706 level(Feb 02’09) gained momentum Tuesday following the pair’s declines off the 1.3330 level printed in late Jan’09,risk is now seen towards EUR’s channel top presently at 1.3070...

-GBPUSD: Nearer Term Direction Remains Unclear - Although a higher close was printed on Tuesday in continuation of the pair’s nearer term up move triggered at the 1.3504 level on Jan 23’09,its inability to push through its recent high at 1.4499 now suggests a consolidation to corrective price mode…

EURUSD: Recovery Gains Exposes Channel Top

EURUSD: As recovery initiated at the 1.2706 level(Feb 02’09) gained momentum Tuesday following the pair’s declines off the 1.3330 level printed in late Jan’09,risk is now seen towards EUR’s channel top presently at 1.3070.Although that level was tested in early trading today, a back off in price was seen suggesting that level should resist further upside incursions. With that said, the broader outlook remains to the downside implying its current upmove is corrective. Our target remains its medium term swing low at 1.2330 printed in late Oct’08.Before that level comes a band of supports at the 1.2766 level, its Jan 23’09 low followed by the 1.2706 level and then the 1.2551 level, its Dec 04’08 low while resistance levels are located at the mentioned channel top which is closely followed by its Nov 25’08 high at 1.3081 with a clearance of there targeting the 1.3298/1.3313 zone, its Jan 06’09 low/Oct 30’08 high. Above here will pave the way for a run at its Jan 19’09 high at 1.3386 followed by the 1.3531 level, its Oct 20’08 high. Its daily stochastics has turned higher supporting its upside view. On the whole, while nearer term corrective upmove can not be ruled out,its broader bias remains lower.

Support       Comments

1.2766         Jan 23’09 low.

1.2551         Dec 04’08 low

1.2330         2008 low

Resistance          Comments

1.3070/81            Channel Top/Nov 25’08 high

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

1.3386                 Jan 19’09 high