HIGHLIGHTS:

GBPUSD: Weakening Within Its Rising Channel -Even though GBP weakened for a third in a row Wednesday, it held above its Tuesday low at 1.4581 and its key support at the 1.4662 level, its Feb 23’09 high suggesting that we may soon see a recovery of its declines triggered at the 1.4959 level, its April 06’09 high.

EURJPY: Putting Pressure On The 131.06 Level -The evening star candle(top reversal signal) referred to in our previous analysis continues to trigger further downside weakness supported by its bearish daily studies.

GBPUSD: Even though GBP weakened for a third in a row Wednesday, it held above its Tuesday low at 1.4581 and its key support at the 1.4662 level, its Feb 23’09 high suggesting that we may soon see a recovery of its declines triggered at the 1.4959 level, its April 06’09 high. Another support for this view is the pair’s rising channel which provides an upside bias while price action remains within it. Resistance now runs from the 1.3655 level, its Mar 11’09 low to its April 06’09/Feb 09’09 highs at 1.4986/65 with a break and hold above there triggering the resumption of its recovery initiated at the 1.3504 towards the 1.5374 level, its Jan 08’09 high. However, if a return below the 1.4662 and the 1.4581 levels occurs, that will put our upside view temporarily on hold and yield pressure towards the 1.4305 level, its Mar 06’09 low and next the 1.4110 level, its Mar 30’09 low ahead of the 1.3845 level, its Mar 18’09 low. The daily stochastics remains supportive of this scenario.All in all, we retain our upside bias while the pair continues to maintain within its rising channel.

EURJPY: The evening star candle(top reversal signal) referred to in our previous analysis continues to trigger further downside weakness supported by its bearish daily studies. It pushed the cross to as low as 130.96 level on Wednesday before closing at 132.16. This price development now leaves the 131.06 vulnerable to being attached and possibly taken out and if this occurs, we could see the turning back into its former range again targeting the 129.72 level, its Dec 29’09 high before the 127.65 level, representing its Mar 13’09 high and next the 126.40 level, its Mar 30’09 low where a cap is expected. Alternatively, we expect the 131.06 level to reverse roles and provide support thereby turning the cross higher again initially towards its Mar 24’09 high at 134.52 ahead of 137.41 level, its April 06’09 high where a breach of the latter will activate the resumption of its short term uptrend off the 112.09 level, its Jan 21’09 low towards the 138.55 level, its Oct 20’08 high. Beyond will create scope for additional gains towards the 141.74 level, its Oct 14’08 high. Onthe whole, we favourthe resumption of EURJPY’s ST uptrend while its present corrective pullbacks are limited to the 131.06 level.