HIGHLIGHTS:

EURUSD: Still Vulnerable And Targeting The 1.3113 Level - EUR sold off hard breaking back below the 1.3330 level, its Jan 27’09 high/former range top after intra day price action put it back above that level briefly on Thursday.

USDJPY: Recapturing Of Short Term High At The 101.43 Envisaged -The pair turned sharply higher Thursday climbing back above the 100.00 level, its psycho level to close at 100.41.

EURUSD: EUR sold off hard breaking back below the 1.3330 level, its Jan 27’09 high/former range top after intra day price action put it back above that level briefly on Thursday. While we noted in our Thursday analysis that a combination of its negative candle formation and its moving average support should provide the platform on which the pair would attempt a recovery of its declines started at the 1.3580 level, its April 06’09 high, Thursday’s price collapse looks to challenge that view with the 1.3113 level, its Mar 30’09 low being targeted where a retest and an eventual break lower will aim at the 1.3097/93 area, its Feb 09’09 high/.50 Ret(1.2456-1.3738 rally). The daily studies are negative and pointing lower suggesting further weakness. Upside objective starts at the 1.3330 level, its Jan 27’09 high/former range top with a clearance of there paving the way for the pair to focus on its falling trendline presently at 1.3532 ahead of the 1.3580 level, its April 06’09 high. The latter level must be decisively violated to signal a move higher towards 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 remains in force nearer term, the 1.3113 or even 1.3097/93 area now looks to preserve the pair’s ST uptrend initiated at the 1.1.2456 level.

USDJPY: The pair turned sharply higher Thursday climbing back above the 100.00 level, its psycho level to close at 100.41.A break and hold above the 100.50 level, its Nov 04’08 high is now expected to signal a recapture of its strong resistance at the 101.43 level, its April 06’09 high. Advancing through there will resume the USDJPY’s short term upmove started at the 87.13 level towards the 102.42 level, its Oct 20’08 high and then the 103.07 level, its Oct 14’08 high. In case of a reversal of its Thursday gains, the 99.68 level, its Mar 05’09 high will be targeted ahead of the 98.96 level, its Mar 17’09 high with a turn below there putting the pair in position to head further lower towards the 95.95 level, its Mar 30’09 low. Daily RSI is trending lower suggesting further downside pressure. On the whole, while the current price activities remain within its established rising channel, our bias remains to the upside.