GBPUSD: After hesitating for a few days following its recovery off the 1.9362 low through its daily falling channel, GBP turned sharply lower on Monday closing the session at 1.9647, above the mentioned invalidated channel. While the unwinding of overbought condition remains on course and prices hold above the broken channel, the pair should resume that recovery but a failure leading to a break back into the channel will leave it targeting the 1.9598 level, its April 15’08 low initially with a loss of there extending the decline towards the 1.9360/35 area, its 2008 lows and possibly beyond. Its medium term bearish outlook and the daily studies which are pointing lower are supportive of this scenario.Conversely,a return above the 1.9727/19 zone, its Mar 05’08/April 01’08 lows followed with a close above the 1.9848 level, its May 22’08 high will pave the way for a run at the 1.9963/ 2.0026 levels, its Feb 27’08/April 21 & 28’08 highs and later the 2.0191 level, its Mar 27’08 high. All in all, as its recent recovery is corrective of its medium term bearish structure, further downside weakness remains a possibility.

Support Comments

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

1.9598 April 15’08 low

1.9360/35 2008 lows.

Resistance Comments

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

2.0396 Mar 14’08

EURUSD: Short Term Risk Remains To The Downside.

EURUSD: EUR was seen recovering from its decline off the 1.5818 high in early trading today. While prices continue to trade below the 1.5817 level the odds of a resumption of its short term weakness remains exposing the 1.5510 level, its April 03’08 low ahead of the 1.5360/41 area, its May 02’08/Mar 24’08 lows/.382 Ret (1.4438-1.6018 rally) with a loss of there if seen driving prices lower towards its May 08’08 low at 1.5283.Below the latter will aim at its .50 Ret (1.4309-1.6018 high) at 1.5164.Daily stochastics remain supportive of this view. On the upside, to recapture its YTD high at 1.6018,EUR requires a decisive break back above key resistance at the 1.5817 high, its May 27’08 high and the 1.5895/I 5912 area, its Mar 31’08 high/April 10’08 high. On the whole, further weakness in line with its short term bearish can not be ruled while trading and holding below the 1.5817.

Support Comments

1.5510 April 03’08 low

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

1.5164 .50 Ret (1.4309-1.6018 high)

Resistance Comments

1.5593 May 06’08 high

1.5710 April 18’08 low

1.5895/I 5912 Mar 31’08 high/April 10’08 High

1.6018 YTD High