In This Issue:

EURUSD: Susceptible To Corrective Recovery - Although EUR retains its overall medium term downtrend triggered off its 2009 high at 1.5143, there are signs that the pair may take yet another stab on the upside.

GBPUSD: Broader Bias Points Lower - While GBP is undoubtedly biased to the downside in the medium term having resumed that trend the past week, the risk now is its...


EURUSD

EURUSD

EURUSD: Susceptible To Corrective Recovery.

EURUSD - Although EUR retains its overall medium term downtrend triggered off its 2009 high at 1.5143, there are signs that the pair may take yet another stab on the upside. This is based on EUR’s inability to sustain its break below its Feb 12’10 low at 1.3530 level on Friday following a reversal of its Thursday losses to close the week marginally lower at 1.3609.
Unless its 2010 low located at the 1.3442 level is retested and eventually broken, we may see the pair head higher in a corrective mode towards the 1.3787 level, its Feb 17’10 high where a break will put EUR on the path to further upside gains towards the 1.3838/51 level (Feb 01’10 high/Feb 09’10 low). We expect that zone to reverse roles and provide resistance thus turning the pair lower. Alternative, a break back below the 1.3442 level will put our corrective downside view on hold and trigger further downside weakness towards its Jun 03’09 low at 1.3211 into focus with a turn below there targeting its big psycho level at 1.5000.


GBPUSD

GBPUSD

GBPUSD: Broader Bias Points Lower

GBPUSD - While GBP is undoubtedly biased to the downside in the medium term having resumed that trend the past week, the risk now is its hammer candle formation(bottom reversal signal) currently seen on the daily chart. This suggests that a corrective recovery higher could be in offing with the key upside target standing at the 1.5532 level, its Feb 08’10 low.
This level is expected to reverse roles and provide resistance thus turning the pair back down again but if that level snaps, we could see further recovery build up towards the 1.5610 level, its Feb 15’10 low and then its Feb 17’10 high at 1.5814 where a cap is envisaged. Its weekly studies are bearish and pointing lower supporting this view. Alternatively, below its 2010 low at 1.5343 will annul the efficacy of the mentioned hammer and resume its broader weakness towards the 1.5276 level, its .50 Fib Ret (1.3501-1.7041 rally) ahead of its big psycho level at 1.5000.