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: Shaping Up For Corrective Pullbacks.

GBPUSD: With overbought condition and price hesitation seen, GBP could be shaping up for corrective pullbacks with the 1.6398 level, its Nov 03’09 high being trageted.However, its overall medium term uptrend remains intact despite the above corrective view.
Weakening below the 1.6398 level will call for further declines towards its May 29’09 high at 1.6199 ahead of the 1.6085 level where its May 27’09 is located and then its psycho level at 1.6000 where a cap is expected. On the other hand, nearby resistance lies at the 1.6673 level, its Oct 30’08 high with a turn above there pushing the pair further higher towards the 1.7000 level, its big psycho level. Further out, the 1.7518 level, its Oct 19’08 high will come in as the next upside target. Our overall outlook on the pair remains higher and any pullback at this stage is seen as corrective of its general upside tone.


EURUSD

EURUSD: Backing Off Higher Prices

EURUSD: After breaking and closing above the 1.4301 level on Tuesday, EUR was seen heading back down towards the 1.4167 level , its May 29’09 high in early trading today. That weakness suggests corrective pullback of its recent run to the upside has begun and should target the 1.4049 level , its May 22’09 high if the 1.4167 level is violated. Below the latter will turn focus to the 1.4000 level where we expect a halt in price. Though the bigger support lies at the 1.3738 level, as long as the pair trades above that level its medium term uptrend remains unharmed. On the downside, EUR’s initial resistance lies at the 1.4330/61 level, its Dec 29’08/Jun 2’09 highs with break through there paving the way for a move towards the 1.4718 level, its Dec 18’08 high. Above that level will trigger further upside gains towards the 1.4867 level, its Sept 22’08 high. On the whole, EUR retains its medium term bullishness but now looks to face corrective downside pressure