HIGHLIGHTS:

GBPUSD:Clears Its Rising Channel, Targets The 1.4305 Level -After spending a month plus trapped within its rising channel, GBP decisively violated that pattern today opening up downside risk towards the 1.4305 level, its Mar 06’09 high

USDJPY: Trading Within Its Rising Channel -Two strong supports at the 97.78 level, its major emasand the 97.48 level, its rising channel base are now being targeted after a violation of the 98.14 level, its April 15’09 low occurred Monday

GBPUSD: After spending a month plus trapped within its rising channel, GBP decisively violated that pattern today opening up downside risk towards the 1.4305 level, its Mar 06’09 high. With the pair now trading below its minor support at the 1.4603 level, its April 13’09 low and testing its daily 50 emacoupled with bearish studies, GBP should maintain its present weakness and even put pressure on the 1.4111 level, its Mar 30’09 high if the 1.4305 level gives way. Further down lies another support at the 1.3844 level, its Mar 18’09 low. On the upside, the 1.4603 level will be targeted at first with a loss of there setting the stage for further upmove towards the 1.4662 level, its Feb 23’09 high where a cap is expected. Above there if seen will aim at its Jan 16’09/Feb 09’09 highs at 1.4981/86 and next the 1.5066 level, its April 16’09 high. All in all, having lost its rising channel and triggered a fresh leg of declines, nearer term outlook has now turned lower.

USDJPY: Two strong supports at the 97.78 level, its major emasand the 97.48 level, its rising channel base are now being targeted after a violation of the 98.14 level, its April 15’09 low occurred Monday. This is coming on the back of a sharp sell off after a follow-through higher failed on Monday. We expect a combination of its major emasand its channel base to halt the mentioned sell and possibly set the pair up for a recovery but if that fails to materialize, we could see the pair declining further lower towards the 95.95 level, its Mar 30’09 low and subsequently the 94.62,its Jan’09 high. . Daily studies are bearish and pointing lower suggesting further weakness. Conversely, recovery higher if triggered should initially drive USDJPY towards the 98.14 level, its April 15’09 low with a loss of there setting the stage for an attack on the 99.68 level, its Mar 05’09 ahead of the 101.43 level, its April 06’09 high. Eventually turning above the latter will resume its short term upside initiated at the 87.13 level towards the 102.42 level, its Oct 20’08 high. On the whole, despite its current weakness as long as the pair holds within it rising channel its short term recovery off the 87.13 zone remains to the upside.