HIGHLIGHTS:

GBPUSD: Building On its Corrective Downside Pressure - GBP followed through lower Thursday breaking through two support levels at the 1.6398 level, its Nov 03’09 high and its May 29’09 high at 1.6199 to close lower at 1.6173.

EURUSD: Corrective Pullback Eyes The 1.4049/00 Levels - EUR’s incursion lower Tuesday failed to materialize as intra day reversal pushed it back higher after testing a low of 1.4069 to close marginally higher at 1.4181.


GBPUSD

GBPUSD

GBPUSD: Building On its Corrective Downside Pressure.

GBPUSD: GBP followed through lower Thursday breaking through two support levels at the 1.6398 level, its Nov 03’09 high and its May 29’09 high at 1.6199 to close lower at 1.6173. This development now suggests a build on the said weakness is likely to be seen driving the pair further lower towards the 1.6085 level where its May 27’09 is located ahead of its psycho level at 1.6000. We expect these levels to provide support halting declines and turning the pair higher again. Below there if seen will target the 1.5777 level, marking its May 26’09 low. Its daily RSI is bullish and trending lower supporting this view. To the topside, if a recovery higher occurs, its two invalidated supports at the 1.6199 and 1.6398 levels will be targeted with a turn above there allowing the pair to accelerate further higher towards the 1.6662/73 level, its /Jun 03’09/Oct 30’08 highs. A break of there will resume its medium term uptrend towards the 1.7000 level, its big psycho level. On the whole, with corrective pullbacks taking hold on the pair, downside weakness looks to be seen in the nearer term.


EURUSD

EURUSD

EURUSD: Corrective Pullback Eyes The 1.4049/00 Levels

EURUSD: EUR’s incursion lower Tuesday failed to materialize as intra day reversal pushed it back higher after testing a low of 1.4069 to close marginally higher at 1.4181. A combination of the 1.4049 and 1.4000 levels is now expected to provide support and halt its current corrective pullbacks thereby preserving its medium term uptrend. However, a break of these levels, could open up further downside weakness towards its strong support at the 1.3738 level where a cap is envisaged. Its daily RSI has turned lower supporting this view. On the upside, EUR’s initial resistance lies at the 1.4330/61 level, its Dec 29’08/Jun 2’09 highs with a break will pave the way for a run at 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 is now facing corrective downside pressure nearer term