GBP/USD & EUR/USD
Tue, Nov 24 2009, 07:15 GMT
by Carol Harmer
GBP/USD
Cable came higher yesterday and hit the short term 50% fib located at 1.6650. You have seen the market back off these higher levels, but currently holding above 1.6550. Short term charts are beginning to turn to show a move higher thus buyers will be defending this 1.6550 support looking for a move back towards the 1.6650/1.6690 region. On rallies to these higher levels you should find buyers will be looking to cover longs. Sellers will be evident also and it is only a break above 1.6710 that would have sellers running for cover.
If this does trade above 1.6710 sellers would reverse their shorts and join buyers in trying to get this market higher for 1.6740/50. This is where the market will once more come under pressure, thus any long positions are looking to be covered.
Now if the market fails to hold above 1.6550 there is scope for 1.6520/10 initially. Buyers will still be trying to defend any important support levels so look for buying activity at these lower levels. If however the market fails to hold 1.6510 you should find the 1.6460/20 support coming under threat.
EUR/USD
Eur/Usd ground to a halt just 1 tick below 1.5000 and has come lower through to 1.4922. Support is at this level and short term charts are desperately oversold, so there is scope for a bounce back higher this morning to ease this oversold scenario.
If however the market makes a break below 1.4910 it would ignore the immediate oversold scenario and trade lower, down to 1.4880 possibly 1.4860 before finding a base., so its quite important that buyers try and hold this above 1.4910..
If buyers can manage to do this you should see the market come higher for 1.4990/95. Buyers are advised to cover longs to these higher levels. Sellers will be evident to here as well, and they will wan to hold unless this breaks above 1.5000. If a break above here is seen then look for 1.5040/65 as a minimum target.
