HIGHLIGHTS:

GBPUSD: Biased To The Upside While Digesting Its Recent Gains -While GBP closed strongly higher at 1.6442 on Monday, its was seen digesting part of those gains in early trading today.

USDJPY: Pressured To The Downside Within Channel -As correction from its declines triggered off the 101.43 level continues to shape up, its overall outlook remains to the downside while holding within its declining channel.


GBPUSD

GBPUSD

GBPUSD: Biased To The Upside While Digesting Its Recent Gains.

GBPUSD: While GBP closed strongly higher at 1.6442 on Monday, its was seen digesting part of those gains in early trading today. With its current upside offensive consistent with its overall medium term trend, we expect the pair to head back above the 1.6398 level, its Nov 03’09 high and then trigger further upside towards the 1.6673 level, its Oct 30’08 high with a clearance of the latter aiming at the 1.7518 level, its Oct 19’08 high. On the other hand, nearer term, this analysis is tempered with GBP’s overbought condition which if triggered will lead to corrective pullbacks. In such a case, its May 29’09 high at 1.6199 will be targeted at first with a turn below there accelerating losses towards the 1.6085 level where its May 27’09 is located and then its psycho level at 1.6000 where a cap is expected. Our overall outlook on the pair remains higher and any pullback at this stage is seen as corrective of its general upside tone.


USDJPY

USDJPY

USDJPY: Pressured To The Downside Within Channel.

USDJPY: As correction from its declines triggered off the 101.43 level continues to shape up, its overall outlook remains to the downside while holding within its declining channel. This development now suggests that on ending its current recovery, lower level prices are expected to follow.
With that said, supports are located at the 96.60 level, its Jun 01’09 low with a turn below there targeting the 93.85/54 level, its Mar 19’09/May 22’09 lows where a break will resume the pair’s downside weakness. To the topside, the 96.69 level, its May 19’09 high will come in as the first target followed by the 97.93 level, its May 06’09 low. Above the latter will open the door for further upside towards the 99.73 level, its May 07’09 high and then the 101.43 level. On the whole, while the falling channel remains unbroken, USDJPY is biased to the downside.