HIGHLIGHTS:

USDJPY: Sees Upside Strength - The pair may be strengthening but while the 91.27 level, its Jan 21’10 high at 91.86 and the 92.00 level, its channel top hold as resistance levels, we look for USDJPY to weaken back towards the 88.54 level, its Feb 04’10 low....

EURUSD: On Corrective Recovery Mode -The pair is building slowly on its corrective recovery following through to the upside on its Monday marginal gains in early morning trading today. …


USDJPY

USDJPY

USDJPY: Sees Upside Strength

USDJPY – The pair may be strengthening but while the 91.27 level, its Jan 21’10 high at 91.86 and the 92.00 level, its channel top hold as resistance levels, we look for USDJPY to weaken back towards the 88.54 level, its Feb 04’10 low. On a decisive break below that level, the pair should decline further towards the 88.30 level, its Dec 14’09with a turn below there turning focus to its Dec 09’09 level at 87.35 and then the 85.85 level, its Nov 30’09 high. Further weakness if seen will put pressure on the 84.80 level, its 2009 low. This view remains valid while the pair trades and maintains within its defined falling channel.
Conversely, to reverse our downside bias, USDJPY must break and hold above the 92.62 level, its channel top thereby clearing the way for higher prices towards the 93.74 level, its 2010 high. This will create further upside scope towards its Aug 02’09 high at 97.77.


EURUSD

EURUSD: On Corrective Recovery Mode

EURUSD –  The pair is building slowly on its corrective recovery following through to the upside on its Monday marginal gains in early morning trading today. This has left risk targeting the 1.3733/47 level, its Jun 16’09 low/.50 retracement (1.2328-1.5143 rally) initially and then its July’09 lows at 1.3831. We expect a combination of these key levels to reverse roles and provide support thereby turning the pair lower. Further out, the 1.4025/28 levels, its Jan 21’10 low/Feb 03’10 high and the 1.4194 level, its Jan 25’10 high come in as the next resistance levels. On the downside, its Feb 08’10 low at 1.3620 comes in as the immediate downside target with a break through that level allowing the pair to weaken further towards 2010 low at 1.3584. A clean violation of the latter will call for the resumption of its medium term weakness towards its .61 Fib retracement/May 18’09 low at 1.3422/09 with a loss of there extending further declines towards its Jun 03’09 low at 1.3211.