HIGHLIGHTS:

GBPUSD: Weakness Suggestive Of A break Of The 1.5706 Level - With the pair sailing through its hammer/Feb01’10/2010 lows at 1.5849/30 to resume its weakness from the 1.6875 level and close lower at 1.5765 on Thursday, we envisage a likely break of the 1.5706 level, …

EURUSD: Challenges The 1.3851/31 Levels -  Risk for a recapture of its YTD/July’09 lows at 1.3851/31 is now seen having wiped out more than half of its two-day recovery following its failure at the 1.4025 level and its subsequent price collapse on Wednesday. Though currently....


GBPUSD

GBPUSD

GBPUSD: Weakness Suggestive Of A break Of The 1.5706 Level

GBPUSD - With the pair sailing through its hammer/Feb01’10/2010 lows at 1.5849/30 to resume its weakness from the 1.6875 level and close lower at 1.5765 on Thursday, we envisage a likely break of the 1.5706 level, its Oct 13’09 low/range lows as GBP was seen following through lower in early trading today. That level is the trigger for the pair’s breakout of its broader sideways range which has deeper bearish implications. However, if we see a back off on initial test of this level we will not be surprised due to its significance. Below there will expose its May 10’09 high at 1.5351 followed by its .50 Fibonacci retracement (1.3501-1.7041 rally) at 1.5273. Its daily and weekly RSI are bearish and pointing lower suggesting further downside weakness. The risk to our current downside view will be a break and hold above the 1.5849/30 levels and the 1.6068/75 levels. However, we expect these zones to reverse roles and provide resistance if seen. Further out, the 1.6274 level, its Jan 28’10 high come in as the next upside target


EURUSD

EURUSD

EURUSD: Challenges The 1.3851/31 Levels

EURUSD - Risk for a recapture of its YTD/July’09 lows at 1.3851/31 is now seen having wiped out more than half of its two-day recovery following its failure at the 1.4025 level and its subsequent price collapse on Wednesday. Though currently challenging the 1.3851/31 levels, a decisive break and hold below there is required to resume its short term declines initiated from the 1.5143 level, its 2009 high towards the 1.3747/33 levels, its Jun 16’09 low/.50 retracement (1.2328-1.5143 rally). A firm invalidation of these levels will call for further downside weakness towards its .61 Fib retracement/May 18’09 low at 1.3422/09 where a cap may be seen thereby triggering a recovery higher. Its daily RSI has turned lower supporting this view. On the other hand, to reverse its current downside vulnerability, EUR will have to break back above the 1.4025/28 levels thereby creating scope for further upside gains 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/Jan 08’10 lows.