HIGHLIGHTS:

GBPUSD: Hitting Its Channel Resistance - With a marginal close seen Monday following a retest of its falling channel resistance, another attempt was seen being made at the same resistance today.

EURJPY: Backing Off Higher Prices - A failed breakout above its symmetrical triangle saw EURJPY tumbling lower Monday to close at 136.98.


GBPUSD

GBPUSD

GBPUSD: Hitting Its Channel Resistance

GBPUSD - With a marginal close seen Monday following a retest of its falling channel resistance, another attempt was seen being made at the same resistance today. GBP continues to struggle within the mentioned channel since breaking into it the past week following its failure at the 1.6692 level, its Oct 23’09 high. A clearance of that level and the 1.6466 level, its Sept 23’09 high must occur to reverse its weakness and open up upside risk towards the 1.6740 level, its Sept 11’09 highwhere a break higher will pave the way for a run at its YTD high at 1.7041. We believe that while the pair continues to trade within its channel, its upside will remain on hold and downside risk is likely. Support is located at its Sept 30’09 high at 1.6124 where a break will create scope for further weakness towards the 1.5708 level printed on Oct 13’09. Below there will trigger the resumption of its short term downtrend. On the whole, while GBP trades within its falling channel, risk remains to the downside with eyes on its short term downtrend resumption.


EURJPY

EURJPY: Backing Off Higher Prices.

EURJPY - A failed breakout above its symmetrical triangle saw EURJPY tumbling lower Monday to close at 136.98. This has halted its attempt to breakout of its triangle pattern and triggered a correction of its move from the 128.98 level. We are now keeping our eyes on the 136.02 level, its Oct 15’09 high if further weakness is seen with a loss of the latter pushing the cross further lower towards the 133.36 level, its daily 200 ema. We expect the former level to hold and provide support thereby turning the cross higher again. Upside objective is located at the 137.97 level, its pattern top with a break of there driving it further higher towards the 138.71 level where its Aug 07’09 high is sited. Above the latter will clear the way for a run at the 139.26 level, its YTD high where a violation will activate the resumption of its MT uptrend. On the whole, failure at higher level prices and its subsequent weakness now suggests further decline but as long as that is seen within its established symmetrical triangle, another attempt at higher prices is expected again