GBP/USD, EUR/USD and STG/EURO
Mon, Jun 1 2009, 06:39 GMT
by Carol Harmer
GBP/USD
Sterling broke higher and the market has continued with strength this morning reaching 1.6245. You have good resistance at 1..6346 and sellers may come in at these higher levels after getting burnt on Friday.
However the major resistance comes from the long term charts at 1.6446/50. This level is from the monthly charts showing the move lower from 2.1161 to 1.3500. The 38% retracement target of this major move is at 1.6446/50 so would expect longer term investors to be at these higher levels taking profits and also looking to short then market.
Although higher, this could retreat from current levels back to the break point of 1.6040 where buyer will be waiting to hoover up and thrust this higher to stated 1.6446.50 resistance.
EUR/USD
Euros broke the Double Top formation as expected on Friday confirming the theory about Triple tops and buyers sailed this higher to 1.4170. Today this has been the high also and buyers are struggling to take a foothold above here.
Now this could be profit taking, some of it and sellers reluctant to relinquish their hold over the market. Anyways, this has to break 1.4170 before buyers will feel more confident of taking positions. If it does there is good resistance at the 1.4200/22 region and sellers will try their hardest to hold the market below here. However buyers are in charge at the moment and any declines look correctionary and should be bought. Above 1.4225 sees sellers quit as buyers lunge forward for 1.4325.
1.4051 should now offer good support and buyers will be waiting if the market dips lower to this region to re-install further longs.
STG / EURO
Stg/Euro has recovered a little, but needs now to break the 1.1480 barrier to ease any further downside moves and leave buyers free to trade higher with 1.1557/74 then the short term objective.
This is excellent resistance from the monthly charts and the first 25% retracement target. It also is the highs for this year and as such will be a difficult barrier to break. Longer term investors will be entering at these higher levels and short term traders should also be aware of this important landmark.
Pullbacks should hold 1.1405, and buyers are expected to defend this support and only turn tail if below 1.1370. Below 1.1370 sees 1.1348 targeted.
