GBP/USD & EUR/USD
Fri, Jan 29 2010, 07:01 GMT
by Carol Harmer
GBP/USD
No change in the market really. We are still range bound. However if I had to choose I would favour a move to the downside for the med term view
1.6080/60 offers good support from the longer term 25% fib level. This has been a defining level since June last year, so you can see the importance of it. If 1.6060 breaks then overall there is scope to go back and re-visit the Dec lows of 1.5890. However this is further along the line. 1.6000 would be the first target for today. Sellers would look to cover They will re-sell if the market makes a break below here, leaving buyers stranded and leaping from longs. 1.5965 would then be your short term objective. Cover here and look to re-sell a break of 1.5940 for 1.5880.
Resistance remains at 1.6240/70 and would sell a bounce to here. As this has been the top of the recent action sellers will defend this rigorously and they will only admit defeat and bow to buyers pressure if above 1.6295. You would then find buyers taking this higher to the longer term 50% fib level located at 1.6330/40. This may well prove to be a difficult barrier to break, thus it is prudent to cover all longs and await to see what the sellers do at these higher levels.
EUR/USD
We have come lower overnight to 1.3912, and although oversold, the market is looking under increasing pressure to trade lower.... There is still the 1.3820 target that has been evident this past few weeks since the break of 1.45 and we are so close to it now that it seems only a matter of time before bears get their wish and reach this target.
This would allow sellers to actually cover positions and fresh buyers to come into the market and try and defend this given that the market is looking oversold on the daily charts... However we have to get through 1.3910 first.
If we don't and the market makes a move higher for 1.3970/80 look for some selling pressure in the short term.. Buyers may well to get on and break this resistance, and 1.3980 breaking sees yelping sellers bypassed as buyers take this higher for 1.4010 initially.. We have to look at this level carefully, as it is the 50% short term fib, so between here and 1.4030 offers good resistance and we should be able to re-sell a bounce to here, keeping stops obviously tight.
