HIGHLIGHTS:

GBPUSD: Reverses Higher, Targets The 1.6075 Level. As we warned on Tuesday of its hammer formation triggering a recovery higher, that has occurred and a build up on that strength is now underway suggesting we could see further gains towards its Jan 22’10 low at 1.6076.

EURUSD: Risk Builds Towards The 1.4028/94 Levels. A build up on its Tuesday gains has seen EUR strengthening in early trading today suggesting a move towards its Jan 21’10 low at 1.4028 and even higher....


GBPUSD

cghar


GBPUSD: Reverses Higher, Targets The 1.6075 Level.

GBPUSD: As we warned on Tuesday of its hammer formation triggering a recovery higher, that has occurred and a build up on that strength is now underway suggesting we could see further gains towards its Jan 22’10 low at 1.6076. That level is a strong pivot and should reverse roles and provide resistance thereby turning the pair lower again but if that fails to materialize, further price build up could shape up towards the 1.6274 level, its Jan 28’10 high and its ST falling trendlineat 1.6360. This view is supported by its daily RSI which is now bullish and pointing higher. However, to reverse its current corrective price action, we need to see a decisive break and hold below its Feb 01’10 low at 1.5849. Further down, the 1.5830 level, its Dec 30’09 low will be targeted ahead of the 1.5706 level, its Oct 13’09 low where the pair may see a respite. Below there will resume its declines started at the 1.7041 level towards its .50 Fibonacci retracement (1.3501-1.7041 rally) at 1.5273.


EURUSD

chart 3

EURUSD: Risk Builds Towards The 1.4028/94 Levels.

EURUSD: A build up on its Tuesday gains has seen EUR strengthening in early trading today suggesting a move towards its Jan 21’10 low at 1.4028 and even higher. Its current upside offensive is coming on the back of its recent weakness off the 1.5143 level and its subsequent recovery initiated from the 1.3851 level on Monday. While we expect the pair to cap its current upside at the 1.4028 level, if that level fails higher prices should be expected towards the 1.4194 level, its Jan 25’10 high. Further out, stronger resistance lies at the 1.4216/62 levels, its Dec 22’09 low/Jan 08’10. The daily RSI is bullish and pointing higher suggesting further strength. On the downside, EUR will have to invalidate the 1.3851 level, its YTD low to bring further weakness towards its July 08’09 low at 1.3831 with a break targeting the 1.3747 level, its Jun 16’09 low or even lower.