EURUSD: A third-day of upside recovery was registered on Monday pushing the pair to as high as 1.5559.This is coming on the back of a corrective bounce off the 1.5285 low following its failure to hold below its strong support at the 1.5360/41 area, its May 02’08/Mar 24’08 lows/.382 Ret (1.4438-1.6018 rally) the past week. The pair’s May 06’08 high standing at 1.5593 will be targeted on any further strength from its present price levels with a break and hold above there setting the stage for higher prices towards the 1.5710 level, its April 18’08 low where a decisive penetration will be required to put the present downside threat on hold and bring more upside gains towards the 1.5895 /me 5912 area, its Mar 31’08 /April 10’08 highs and then its psycho level/YTD high at 1.6000/18.This view remains in line with its medium and longer term outlooks.However,continued trading at the present levels or even below the 1.5710 level should put pressure on the downside towards the 1.5360/41 zone followed by the 1.5164 level, its .50 Ret (1.4309-1.6018 high) or even lower aiming at its .618 Ret at 1.5048.Daily studies are positive and trending higher supporting this view. On the whole, EUR remains on a recovery path from its recent low at 1.5285 but its short term trend remains to the downside.

Support Comments

1.5360/41 .382 Fib Ret/Mar 24’08 low/May 02’08

1.5164 .50 Ret (1.4309-1.6018 high)

1.5048 .618 Ret

Resistance Comments

1.5626/00 April 07’08 low/Psycho Level

1.5710 April 18’08 low

1.5895/I 5912 Mar 31’08 high/2008 Peak

1.6000/18 Psycho Level/YTD high

Daily Chart: EURUSD

GBPUSD: High Wave Candle Suggests Uncertainty Nearer Term While Broader Bias Points Lower.

GBPUSD: While its test of lower prices at 1.9441 on Monday and subsequent close at 1.9531 forming a high wave candle may have suggested confusion nearer term, GBP’s medium term outlook continues to point to the downside. This implies that if any recovery at the present levels materializes, it will be seen as corrective which should turn the pair lower again on completion. Downside objectives are located at its 2008 lows at 1.9360/35 with clean cut through there extending prices towards the 1.9180 level, representing its Mar 04’08 low. This is backed by momentum action on the weekly chart. Resistance comes in initially at the 1.9598 level, its April 15’08 low followed by the 1.9727/19 area, its Mar 05’08/April 01’08 lows ahead of the 1.9963/ 2.0026 levels, its Feb 27’08/April 21 & 28’08 highs and then the 2.0191 level, its Mar 27’08 high. Overbought condition on the daily time frame remains a factor that might trigger a corrective nearer term recovery. All in all, as long as the pair continues to trade within its daily and weekly falling channels and the 1.9598 level, risk remains to the downside with the 1.9360/35 zone seen as the next downside target.

Support Comments

1.9360/35 2008 lows.

1.9180 Mar 04’07 low

1.8902 Weekly 200 Ema

Resistance Comments

1.9674/53 April 25’08 low/Aug 17’07 high

1.9727/19 Mar 05’08/April 01’08 lows

1.9963/2.0026 Feb 27’08/April 21 & 28’08 highs

2.0191 Mar 27’08 high

Daily Chart: GBPUSD