EURUSD: Declines Halt, Corrective Recovery Triggered - EUR paused its declines activated at its Mar 19’09 high at 1.3738 the past week and embarked on a corrective rally to close higher at 1.3242.

GBPUSD: Price Hesitation Still Seen - Even though GBP broke below its daily rising channel the past week and held below it, the price action that followed that break remained unconvincing as a clear follow through on that break did not occur.

EURUSD: EUR paused its declines activated at its Mar 19’09 high at 1.3738 the past week and embarked on a corrective rally to close higher at 1.3242. This is coming on the heels of a turn off the 1.2889 level, its April 20’09 low followed with a four-day of higher closes. This now suggests that further upside is envisaged and price should now shape up towards its channel top at 1.3378 which is within the vicinity of its April 13’09 high at 1.3392. These two key levels should provide strong resistance and turn down the pair thereby continuing its declines.However,if that fails to materialize, further higher prices should build up towards the 1.3553/83 area where its daily 200 ema/April 06’09 high is located with a turn above there clearing the way for an additional acceleration of price towards its Mar 19’09 high at 1.3738 and possibly beyond. This view continues to be supported by its positive weekly and daily RSI suggesting further upside. Supports are located at the 1.3113 level, its Mar 30’09 low and the 1.3090/93 level, its Feb 09’09 high/April 09’09 low ahead of the 1.2992/1.3000 area, its Feb 23’09 high/psycho level .Breaking and holding below the latter will expose the 1.2889 level, its April 20’09 low with a loss of there triggering the resumption of its short term declines off the 1.3738 level towards the 1.2456 level, its Mar 04’09 high. On the whole, though correction is now in force while that is limited within its declining channel and its series of lower highs and lower lows is in place, we retain our downside view for an eventual resumption of EUR’s declines off the 1.3738 level.

GBPUSD: Even though GBP broke below its daily rising channel the past week and held below it, the price action that followed that break remained unconvincing as a clear follow through on that break did not occur. While a negative weekly close was recorded the past week, that ended with the formation of a hammer(a negative candle signal) which is similar to the higher level rejection candle(shooting star) printed the previous week. The implication of this price action is that indecision of a clear directional moves in the nearer term is now setting in. Downside objectives are situated at the 1.4662 level, its Feb 23’09 high ahead of the 1.4305 level, its Mar 06’09 high and later the 1.4111 level, its Mar 30’09 high. To the topside, its Jan 16’09/Feb 09’09 highs at 1.4981/86 comes in as the next upside target followed by the 1.5066 level, its April 16’09 high. A clearance of the latter level will open the door for the resumption of the pair’s recovery towards the 1.5374 level, its Jan 08’09 high. Its weekly stochastics remains supportive of this view as it is heading higher. This remains supportive of our view that the pair could be forming a bottom with the caveat being a hold above its bigger support level at the 1.3504 level. All in all, despite the fact that indecision is now seen, as long as the pair maintains above the 1.3505/1.3655 zone, our bottom forming process case still holds.