HIGHLIGHTS:

-EURUSD: Established Falling Channel Keeps Focus To The Downside- Recovery setback at the 1.3070(channel top) has seen EUR collapsing and closing lower at 1.2855 on Wednesday...

-USDCAD: Continued Hold Below The 1.2371/94 Area Suggest Further Lower Prices - The pair recorded a second-day of consecutive downside losses Wednesday and was heading lower in early morning trading today…

EURUSD: Established Falling Channel Keeps Focus To The Downside

EURUSD: Recovery setback at the 1.3070(channel top) has seen EUR collapsing and closing lower at 1.2855 on Wednesday. Having taken back almost all of its Tuesday upside gains and continued to trade within its established declining channel, weakness is now expected initially towards the 1.2766 level, its Jan 23’09 low followed by the 1.2706 level and subsequently the 1.2551 level, its Dec 04’08 low .But the ultimate level stands at the 1.2330 level, its 2008 swing low. We expect this level to give way and trigger the resumption of its medium term declines now on hold. Its daily RSI remains supportive of this view.However,a return back above its Nov 25’08 high at 1.3081 followed with a close above the 1.3298/1.3313 zone, its Jan 06’09 low/Oct 30’08 high will be required to prevent its current downside threats and bring gains towards its Nov 25’08 high at 1.3081 and then the 1.3298/1.3313 zone, its Jan 06’09 low/Oct 30’08 high. On the whole, while the pair remains medium term bearish and continues to maintain within its falling channel, lower prices are expected to be printed.

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