HIGHLIGHTS:

EURUSD: Correction Continues To Unfold -The pair continues to consolidate its recent run to the upside weakening to as low as 1.3859 intra day before backing off to close at 1.3982 on Tuesday.

GBPUSD: Struggling With The 1.6000 Level -Having reversed its intra day losses to close marginally higher at 1.5969 on Tuesday, GBP was seen trading higher above its big psycho level in early morning trading today.


EURUSD

EURUSD

EURUSD: Correction Continues To Unfold.

EURUSD: The pair continues to consolidate its recent run to the upside weakening to as low as 1.3859 intra day before backing off to close at 1.3982 on Tuesday. We maintain that as long as EUR continues to correct and hold above the 1.3720/38 levels, its Mar 04’09/May 13’09 highs, potential for the resumption of its ST uptrend remains. With that said, support is initially located at the 1.3720/38 levels, its Mar 04’09/May 13’09 highs where a cap is expected. Below there will accelerate more declines towards the 1.3446 level which is the location of its 200 daily emaand then the 1.3385 level, its April 30’09 high. On the upside, invalidating its strong psycho level at 1.4000 is required to trigger further upside gains towards the 1.4049 level , its 2009 high with a loss of there opening the door for the resumption of its short term upside towards the 1.4361 level, its Dec 29’08 high ahead of the 1.4718 level, its Dec 18’08 high. On the whole, EUR looks to resume its ST uptrend on ending its current corrective price activities.


GBPUSD

GBPUSD: Struggling With The 1.6000 Level.

GBPUSD: Having reversed its intra day losses to close marginally higher at 1.5969 on Tuesday, GBP was seen trading higher above its big psycho level in early morning trading today. A decisive break and hold above that level is required to trigger the resumption of its ST uptrend initiated off the 1.3655 level towards the 1.6398 level, its Nov 03’09 high and possibly higher. This view remains supported by its weekly momentum indicator which are bullish and pointing higher. Downside targets are located at the 1.6000 level and the 1.5724 level, its eroded resistance which should now provide support. If a trade below there occurs, we could see the pair declining further towards the 1.5450 level which is the location of its daily 200 emafollowed by the 1.5373 level, its Jan 08’09 high. All in all, with GBP now holding above 1.6000 level, risk of further upside gains is likely.