In This Issue:

EURUSD: Break Of The 1.5298 Level Or The 1.2330 Level To Trigger Directional Moves- While EUR remains trapped between the 1.3298 level, its Oct 30’08 high and the 1.2330 level, its YTD low, medium term decline off the 1.6038 high remains on hold…

GBPUSD: Failure At The 1.6673 Level To Yield Losses Towards Its YTD Low at 1.5265- We have our eyes on a test and break of the 1.5265 level, its YTD low to resume its medium to long term weakness started at the 2.1161 level towards the 1.5219 level, its Oct’02 low followed by the 1.4837 level, its Oct 2001 high and possibly beyond …

USDJPY: Corrective Recovery Off The 90.91 Level Loses- The pair’s inability to extend corrective recovery off the 90.91 through its psycho level/.50 Ret (110.67-90.91 decline) at 100.00/84 has now increased the odds of lower prices towards the 95.75 level, its Mar’08 low ahead of its bigger support at its YTD low at 90.91..

Break Of The 1.5298 Level Or The 1.2330 Level To Trigger Directional Moves.

EURUSD- While EUR remains trapped between the 1.3298 level, its Oct 30’08 high and the 1.2330 level, its YTD low, medium term decline off the 1.6038 high remains on hold. This now puts the pair on a consolidation to sideways path until meaningful directional moves is activated through a break either way(1.2330 or 1.3298).The entire G10 currency complex and our 7 currency model with the exception of USDJPY remains in corrective phases suggesting that on ending those corrective recoveries the various pairs should resume their primary trends.EUR is in alignment with this view and the 1.2330 and beyond are expected to be tested and finally broken to resume its medium term decline towards the 1.2134 level, its .50 Ret (its 0.8231-1.6038 high, monthly chart) ahead of the 1.1827 level, its Mar’06 low and subsequently its Nov’05 low at 1.1640.Resistance is initially located at 1.3116 level, representing its Nov 05’08 high where a break higher could target the 1.3259/98 level, its Oct 10’08 low/Oct 30’08 high. This is the location of its current range top and decisively clearing there will set the pay up for a run at the 1.3666 level, its Dec’04 high.On the whole, we still retain our medium term bearish bias and expect the pair to head to the downside after completing its corrective price activities.

Directional Bias:

Nearer Term –Mixed

Short Term –Bearish

Medium Term –Bearish

Performance in %:

Past Week: +0.29%

Past Month: -5.03%

Past Quarter: -9.87%

Year To Date: -12.50%

Weekly Range:

High -1.3116

Low -1.2527