HIGHLIGHTS:

EURUSD: Downside Vulnerability Remains In Progress- A follow through to the downside on its Wednesday sell off saw the pair test a low of 1.2761 before closing at 1.2789 on Thursday...
EURGBP: Triggers The Resumption Of Its Short Term Downtrend - A clean cut through its Jan 09/16’09 lows at 0.8844/38 Thursday has seen the cross resuming its short term declines initiated at the 0.9803 level to close the session at 0.8744…

EURUSD: Downside Vulnerability Remains In Progress.

EURUSD: A follow through to the downside on its Wednesday sell off saw the pair test a low of 1.2761 before closing at 1.2789 on Thursday. The immediate risk is for the pair to retest and decisively break the 1.2766 level, its Jan 23’09 low ahead of the 1.2706 level and then the 1.2551 level, its Dec 04’08 low .On overcoming these hurdles, EUR should target its 2008 swing low standing at 1.2330.Our broader(MT) view is for a sustained break of that level accelerating further downside weakness towards its Feb’06 low at 1.1824. On the upside, 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 price action points lower and remains within the declining channel, EUR risk further downside weakness.

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