HIGHLIGHTS:

EURUSD: Weakness With The 1.3113 Level In Focus - As a second day of downside weakness drove the pair back below the 1.3330 level, its Jan 27’09 high/former range top, focus has now shifted to the 1.3113 level, its Mar 30’09 low.

USDJPY: Hesitating But Bullish In The Short Term - Although price action Tuesday tumbled and nearly wiped out pair’s Monday gains, as long as USDJPY continues to trade above the 100.00 level, its psycho level and the 99.68 level, its Mar 05’09 high risk remains to the upside in the short term.

EURUSD: As a second day of downside weakness drove the pair back below the 1.3330 level, its Jan 27’09 high/former range top, focus has now shifted to the 1.3113 level, its Mar 30’09 low. Weakening through that level will put the pair on the path to further downside pressure towards the 1.3097/93 area, its Feb 09’09 high/.50 Ret(1.2456-1.3738 rally) .The daily RSI which is bearish and trending lower remains supportive of the pair’s downside view. Alternatively, in order to relieve its present downside threats,EURUSD must break and close above the 1.3330 level at first followed by the 1.3580 level, its April 06’09 high. While it holds above these key levels, we envisage a run at the 1.3738 level, its Mar 23’09 high where a clean break will resume its short term uptrend set off at the 1.2456 level, its Mar 04’09 high towards the 1.3964 level, representing Jan 05’09 high. On the whole, though correction is now in force nearer term, as long as the 1.3113 level remains as support, our bias remains for an eventual retest of the 1.3738 level and possibly higher

USDJPY: Although price action Tuesday tumbled and nearly wiped out pair’s Monday gains, as long as USDJPY continues to trade above the 100.00 level, its psycho level and the 99.68 level, its Mar 05’09 high risk remains to the upside in the short term. This suggests that its present price hesitation is corrective of its run off the 95.95 level, its Mar 30’09 low. Another clear bullish evidence outside price supports seen on the chart is its ST rising channel which puts bias to the upside. The pair now requires a return above the 100.50 level, its Nov 04’08 high followed with a close above the 101.43 level, its April 06’09 high to open up further upside gains towards the 102.42 level, its Oct 20’08 high and then the 103.07 level, its Oct 14’08 high.Conversely,building on its Tuesday weakness will mean a move lower targeting the 100.00 level and the 99.68 level at first where a cap is expected but if a snap below these levels occurs we should witness declines towards the 98.97 level, its Mar 17’09 high. The daily stochastics remains in overbought zone but has made a bearish crossover suggesting a relieve of the mentioned condition could be shaping up. On the whole, while the current price hesitation remains within its established rising channel, our bias remains to the upside.