HIGHLIGHTS:

GBPUSD: Risk Remains To The Upside - Outlook for GBP continues to point higher having printed a higher close on Monday and held above its MT rising trendline.

EURUSD: Holds On To Gains, Focuses On Minor Resistance - Although strength was limited to the 1.4297 level on Monday before closing at 1.4238, EUR still retains its upside bias triggered off the 1.3831 level.


GBPUSD

GBPUSD

GBPUSD: Risk Remains To The Upside

GBPUSD- Outlook for GBP continues to point higher having printed a higher close on Monday and held above its MT rising trendline. Although this view is being tempered with a correction, as long as that is maintained above its MT rising trendline, risk points to the upside. With that said, minor swing high residing at the 1.6584 level will come in as the immediate upside target with a trade above there setting the stage for a run at its 2009 high at 1.6742. A clean penetration and negation of there will resume its medium term uptrend and open further upside towards the 1.7000 level, its psycho level. On the downside, its July 22’09 low at 1.6308 comes in as the initial support followed by the 1.6034 level, its July 13’09 low and then its July 08’09 low at 1.5984. While the last two levels are expected to reverse roles and provide support, a turn below there will set the stage for a move lower towards the 1.5802 level, its Jun 08’09 low. All in all, GBP looks to retarget the 1.6742 level as it still maintains its overall medium term upside bias.


EURUSD

EURUSD

EURUSD: Holds On To Gains, Focuses On Minor Resistance.

EURUSD- Although strength was limited to the 1.4297 level on Monday before closing at 1.4238, EUR still retains its upside bias triggered off the 1.3831 level. That leaves upside threats seen towards the 1.4297 level, representing its July 27’09 high with cut through there opening the door for further upside towards the 1.6339 level, its YTD high. A climb above there will clear the way for higher prices towards the 1.4719 level, its Dec 18’08 high. This view is supported by its weekly and daily RSI which have turned higher. Downside objective starts at the 1.4200 level, its July 01’09 high ahead of the 1.4164 level, its July 17’09 high and then the 1.4072 level, its July 09’09 high with a turn below there leaving the pair targeting the 1.3897 level, its July 13’09 low. Further down, on a break of the latter, the 1.3831 level, its July 08’09 low will be aimed at before the 1.3748 level, representing its Jun 16’09 low. That level which doubles as its range bottom between the 1.4339 and 1.3748 levels is expected to cap declines if seen. On the whole, with a second week of upside seen, EUR looks to retest and possibly trigger the resumption of its medium term upside.