HIGHLIGHTS:

GBPUSD: Correction Triggered - GBP came off its intra day low at 1.5706 to close higher on Tuesday and was seen building on those gains in early trading today.

EURUSD: Breaks The 1.4844 Level, Eyes The 1.5000 Level - Upside momentum built from the 1.4479 level, its Oct 02’09 continued with a higher close on Tuesday and follow-through higher.


GBPUSD

GBPUSD

GBPUSD: Correction Triggered

GBPUSD - GBP came off its intra day low at 1.5706 to close higher on Tuesday and was seen building on those gains in early trading today. Having temporarily halted its ST downtrend triggered off the 1.7041 level, threats remain higher towards its Sept 30’09 high at 1.6124. Ahead of that level will bring the 1.6300 level, its psycho level into focus and then the 1.6463 level, its Sept 23’09 high. The current strength is counter to its ST downtrend and remains corrective. Its daily RSI is bullish and pointing higher suggesting further strength. Supports are located at the 1.5837 level, its Oct 13’09 high and the 1.5706 level, its Oct 13’09 low with a turn below the latter accelerating further declines towards the 1.5500 level, its psycho level and then its .50 Ret( 1.3652-1.7041 rally) at 1.5350. On the whole, GBP has triggered a corrective upmovehalting its ST downtrend and targeting further upside.


EURUSD

EURUSD

EURUSD: Breaks The 1.4844 Level, Eyes The 1.5000 Level

EURUSD - Upside momentum built from the 1.4479 level, its Oct 02’09 continued with a higher close on Tuesday and follow-through higher today breaking decisively above its YTD high at 1.4844. Having maintained our call for that break and a resumption of its medium term uptrend started at the 1.2456 level in our past analysis, we risk see towards its psycho level at 1.5000 and then the 1.5082 level, its Aug 10’08 high. Beyond the latter will turn focus to the 1.5282 level. However, EUR may face some tough times at the 1.5000 level on first test but any pullback at that level is seen as corrective. Its daily studies are bullish and trending higher supporting this view. On the downside, pullbacks if seen should target its eroded resistance levels at the 1.4875/44 level, its Sept 21’09 high/former YTD high. A reversal of roles is expected at these levels to turn the pair back up gain. Further down, its Oct 09’09 low at 1.4672 level will come in as the next target with a violation of that level paving the way for further declines towards the 1.4479 level, its Oct 02’09 low where a cap is likely. On the whole, with the resumption of its medium term uptrend activated, risk now remains higher towards the 1.5000 level.