EURUSD: Out Of The Range With Potential For A Run At The 1.3857/82 Level A sharp rally through the 1.3330 level, its Jan 27’09 high/range top saw EUR follow through on its morning star(bottom reversal signal) formation highlighted in our previous week analysis to close week higher at 1.3582.

GBPUSD: Closes Marginally Lower On Rejection Candle Formation - As the pair smashed through its key resistance levels at its Feb 02’09 low at 1.4052 and the 1.4137 level ,its Feb 12’09 low to break above its ST declining channel on the daily chart and close higher at 1.4462 the past week, risks of further higher prices are now seen towards the 1.4662 level, its Feb 23’09 high .

EURUSD- A sharp rally through the 1.3330 level, its Jan 27’09 high/range top saw EUR follow through on its morning star(bottom reversal signal) formation highlighted in our previous week analysis to close week higher at 1.3582.With a clearance of its range top between the 13330 and the 1.2330 levels and a loss of its Jan 19’09 high at 1.3386 seen, nearby resistance residing at the 1.3799 level, its Jan 08’09 high is now being targeted ahead of a bigger resistance zone at the 1.3857/88 levels,its.618 Ret(1.4719-1.2330 declines)/Sept 11’08 high. While pullbacks cannot be ruled out on its way to further upside, other key resistance levels are seen at the 1.4363 level, its Dec 29’08 high and then its Dec 19’08 high at 1.4719.This level is very significant as a cut through there will not only resume its recovery off the 1.2330 level in Dec’08 but confirm its potential double bottom chart pattern drawn in Oct’08 and Mar’09.This will put the pattern price target if it occurs way above its all time high at the 1.6038 level. Weekly stochastics and RSI are positive and heading to the upside supporting this view.However,nearer term corrective pullbacks could occur especially now that its daily studies are overbought and Friday trading session saw a negative close. In such a case, its weekly ema currently at the 1.3463 level will come in as the initial downside target before the 1.3330 area, Jan 27’09 high where a break will put attention on the 1.3093 level, its Feb 09’09 high and subsequently the 1.2992/1.3000 area, its Feb 23’09 high/psycho level. On the whole, with range break out seen, potential for further upside exists.

GBPUSD- As the pair smashed through its key resistance levels at its Feb 02’09 low at 1.4052 and the 1.4137 level ,its Feb 12’09 low to break above its ST declining channel on the daily chart and close higher at 1.4462 the past week, risks of further higher prices are now seen towards the 1.4662 level, its Feb 23’09 high. We see a retarget of its Jan 16’09/Feb 09’09 highs at 1.4981/86 on a clean violation of the latter. While our overall outlook still remains lower in the medium to longer term, the present price pressure on the upside triggered at the 1.3655 level(Mar 11’09 high)looks to be sustained and beyond the 1.4981/86 zone will open the door for the resumption of the pair’s recovery started at the 1.3504 level towards the 1.5374 level, its Jan 08’09 high. Weekly RSI remains positive in structure suggesting additional strength. On the downside, corrections are expected to target the 1.4305 level, its Mar 06’09 high at 1.4305 with a break of there putting the next target at the 1.4137 level, its Feb 12’09 low and then its Feb 02’09 low at 1.4052. Below the latter will reverse GBP’s present upside incursions and yield price declines towards its Mar 11’09 low at 1.3655 and next its YTD low at 1.3504 level. Overall, having activated a nearer term upside on the back of a run off the 1.3655 level, more pressure is expected on the upside.