HIGHLIGHTS:

GBPUSD: Still Maintaining Its Corrective Outlook Nearer Term - Having weakened for three consecutive days and tested a low of 1.5801, an intra day reversal saw GBP closing higher taking back all of its losses to close at 1.6049 on Monday.

EURUSD: Corrective Pullback Still Dominates - Continued corrective downside weakness saw EUR trading lower Monday coming within some pips ahead of its strong support at the 1.3738 level, marking its Mar 19’09 high.


GBPUSD

GBPUSD

GBPUSD: Still Maintaining Its Corrective Outlook Nearer Term.

GBPUSD: Having weakened for three consecutive days and tested a low of 1.5801, an intra day reversal saw GBP closing higher taking back all of its losses to close at 1.6049 on Monday. It was seen following through higher on those gains today suggesting further upside could shape towards the 1.6398 level, its Nov 03’09 high and its May 29’09 high with a turn above there leaving the pair for further upmove targeting its 2009 high resting at 1.6663.Its medium term upside will be triggered on a loss of the latter opening up more upside gains. Its daily RSI has turned higher supporting this view. On the downside, its May 27 high at 1.6085 will come as the nearby support followed by the 1.6000 level is psycho level. While we expect the latter level to provide support, if a loss of there occurs, GBP could weaken further lower towards the 1.5810 level, its Jun 08’09 low. All in all, while we retain our medium term bullish outlook on EUR, it requires an end to its present correction and a break above the 1.6662 level to resume that uptrend.


EURUSD

EURUSD

EURUSD: Corrective Pullback Still Dominates.

EURUSD: Continued corrective downside weakness saw EUR trading lower Monday coming within some pips ahead of its strong support at the 1.3738 level, marking its Mar 19’09 high. We envisage that level should reverse roles and provide support thereby turning the pair higher preserving its MT uptrend started at the 1.2456 level. Below there if seen should bring further weakness towards the 1.3424 level, its May 18’09 low. Its daily studies are bearish and turning lower supporting this view. On a halt of its corrective weakness, EUR should gain strength initially towards the 1.4000 level, its psycho level with a break of there exposing more upside towards the 1.4330/61 level, its Dec 29’08/Jun 2’09 highs. A loss of there will pave the way for the resumption of pair’s medium term uptrend towards the 1.4718 level, its Dec 18’08 high. On the whole, with corrective downside now in progress and its medium term uptrend temporary on hold, risk of lower level prices remain.