GBP/USD & EUR/USD
Tue, Nov 17 2009, 09:17 GMT
by Carol Harmer
GBP/USD
After being quiet all session the market broke up after London had gone and reached 1.6879. You have seen the market pullback from these higher levels, but whilst above 1.6780 there is more scope for this to trade higher.
1.6900 is your short term resistance. A break above here keeps the market looking buoyant and sees this come higher for 1.7045. Now this was the highs of the beginning of August. This should offer excellent resistance and you will find sellers are waiting at these highs to keep the market underpinned. However there is a theory that if a H&S pattern fails then the market will resume then prior trend and exceed the head and trade beyond this point. So in the short term expect this to hold, but be wary of the longer term implications.
If today bears can break below 1.6790 then the market would be out of the danger zone and find its way to 1.6740. Now this s quite important support, so this really does have to hold if this market is make any further progress in the short term
EUR/USD
Eur/Usd broke higher to 1.5017, but couldn't maintain over 1.500 and is trading lower. We have hit the 38% fib level of 1.4942 and if this fails look for the market to come lower with 1.4899 the nearby targeted area.
Here buyers will be looking to go long, but they will be waiting to elope away from Euros if below 1.4890. A loss of this support keeps the bias to the downside and sees this come lower for 1.4850 to 1.4820. Within this band sellers will be willing to cover all shorts. You should then find fresh buyers here and only a break of 1.4820 would negate further upside moves.
1.4920 holding does leave scope for this to come back higher above 1.4840 for 1.4990. Once more longs should be covered. Only above 1.5000 would buyers come in again looking for 1.5020/40.
