GBP/USD & EUR/USD
Tue, Feb 2 2010, 06:43 GMT
by Carol Harmer
GBP/USD
Cable bounced from trend line at 1.5880, after slippage through to 1.5850..Now we have seen a rally to 1.5975 and this is the short term 38% fib level so we are aware of its importance. The short term charts do show this to be neutral at present, wt a little bit more emphasis on the downside. However there is still this trend line lurking on the daily charts, moving today to 1.5887. Now the longer term daily charts are showing this to be oversold on the daily stochastics, and therefore we are cautions about a sustained break of this trend line. Sellers will only want to get involved if the market does break through 1.5850. Only then will there be selling pressure through to the lows of 1.5720/00. Buyers will be defending this support and only a los of 1.5685 would gain the sellers interest once more.
So we should be looking at another move to the topside with the first obstacle of 1.5975 to negotiate. If we can clear this and also the psychological level of 1.6000 then buyers will regain interest and be looking to take this higher for 1.6054 initially with good possibility of 1.6050mto 1.6100.
Failure as stated at these highs do leave the market n a precarious position and the likely out come will be a return to trend line support at 1.5887.
EUR/USD
We have turned a little on the Eur/Usd and this is now in need of some corrective pressure to the topside. A break above 1.3940 would be the trigger point for this today and that would show that the market is ready to correct higher with 1.3970 then 1.4010 looking to entice.
Here buyers will look to take profits and sellers will be expected to these higher levels as well...If however buyers feel the urge to come and slip past 1.4035 you will see further corrective pressure with 1.4090 then seen as your short term objective. Here buyers will cover and sellers will try and adamant about letting these buyers get away with any more upside moves. Sellers therefore will be all out defending this resistance and will only relinquish control if above 1.4110.
Now if we cannot break the 1.3940 barrier look for a return to 1.3875 to1.3855 support. Shorts to be covered to here. Allow buyers to take longs here and only will they worry of this breaks the 1.3800 support level.
