GBPUSD & EURUSD
Thu, Nov 12 2009, 06:20 GMT
by Carol Harmer
GBP/USD
Cable hit 1.6800 and dumped. 1.6535 was the lows and although this has recovered off these lows back to 1.6628 this morning there still seems to be more downside pressure to come. Both the long and short term charts are calling for weakness and below 1.6560 sees this come lower once more for 1.6440/20. At these lows you may well see buyers come into the market, as this would have fallen 4 points in two days thus in need of correction, but cable overall does look weaker.
Rallies from current levels should be sold. 1.6620/40 offers good short term resistance and sellers will be waiting here to re-instate shorts looking for another move lower. They would only review position if this broke above 1.6680. Above here sees a short burst to 1.6710 and sellers will once more be waiting. Only above 1.6740 would the short term picture alter.
So below 1.6560 as stated sees 1.6440/20 as your overall short term objective. This level of support is expected to hold and sellers would be advised to cover prior this support which will be met with determined buyers hoping to stave off another onslaught of Cable selling. Below 1.6400 sees the buyers fail.
EUR/USD
Eur/Usd broke higher to 1.5051 but rallies were not sustained and the market fell then to 1.4950. Now this has rallied slightly off these lower levels, but now we look to the daily charts for guidance. These have good resistance at 1.5065 and this is the level that needs to be broken and sustained to keep off further downward pressure.
If this resistance fails to break it would put pressure on the downside and see this come lower back through 1.4920 for 1.4870/62. Initially this should hold the decline and sellers would be advised to cover shorts to here. They will wait a little to gauge the buyers response but if they fail to get some form of buyers interest at 1.4850 sellers will once more rule the day and drive this lower for 1.4815/07 support band. Once more sellers will cover and they will only be looking at 1.4800 for a chink to re-sell..
Now all bets are off on a break above 1.5065. A break above here would negate the topping pattern and drive this higher to excellent resistance from weekly fib level at 1.5107.
