Today's Focus: EURUSD & GBPUSD
* EURUSD: Corrective Decline Sees Respite At The 1.3298 Level.
* GBPUSD: Maintains Its Consolidation To Corrective Mode
A follow-through to the downside on its recent decline started at 1.4719(Dec 18'08) took a breather Tuesday halting at the 1.3298 level, its Dec 11'08 high/former range top to close the session at 1.3505.A lower shadow rejection candle is now in place(a sign of a temporary halt in price decline).Pressure however remains to the downside with a decisive break and hold below the 1.3298 level paving the way for a run at its .618 Fib Ret (1.2330-1.4719 rally)support at 1.3244. Further out, support are situated at its Nov 25'08 high at 1.3081 and its Dec 04'08 at 1.2848.Odds for additional downside pressure is clearly supported by the loss of the 1.3828 swing low after a failure at the 1.3919 level smashed EUR through the said level creating a reversal price picture. Recovery higher if seen is expected to challenge the 1.3785 level, its Oct 09'08 high initially and then the 1.3882 area, its Sept 11'08 high. On the whole, we retain our bearish medium term and nearer term outlooks and see any recovery higher as temporary.
1.3531 Oct 20'08 high
1.3298 Dec 11'08 high/former range top
1.3244 .618 Fib Ret (1.2330-1.4719 rally)
1.3785 Oct 09'08 high
1.3882/1.3900 Sept 11'08 high/.618 Ret.
1.4363 Dec 29'08 high.
Following its decline to a new low of 1.4352 last week, GBP has been correcting higher slowly clearing its minor resistance at the1.4831 level, its Jan 01'08 on Tuesday to close higher at 1.4911.The pair remains biased to the downside in the short, medium and long terms suggesting that any strength seen is corrective and should fade turning GBP lower again. Support runs through the 1.4558 level, its Nov 13'08 low, its Dec 04'08 low at 1.4470 and subsequently the 1.4352 level, its YTD low. Below the latter is expected to trigger the resumption of its medium/long term declines. If a continuation of its Tuesday strength follows, the pair should target the 1.5250/65 zone at first followed by the 1.5534 level, its Nov 25'08 high. Beyond there will signal a retest of the 1.5724 level, marking its Dec 17'08 high. All in all, while corrective upmove cannot be ruled out at this stage especially now that daily studies are trending higher, such strength is seen as corrective.
1.4558 Nov 13'08 low
1.4470 YTD low
1.4352 YTD low
1.4831 Jan 01'09 high
1.5250/65 Nov 19'08 high/Oct 24'08 low
1.5534 Nov 25'08 high