Today's Focus: EURUSD & GBPUSD
- EURUSD: Loss Of The 1.2706/22 Area Has Potential Risk Extension Towards The 1.2330 Level.
- GBPUSD: The 1.4137 Level Continues To Look Vulnerable.
With another attempt yielding a clean break below the 1.2766 level, its Jan 23'09 low and 1.2706 level, its Feb 02'09 low in early morning trading today, its immediate support at the 1.2551 level, marking its Dec 04'08 low is now being targeted. Penetrating and negating the latter will risk further downside towards the 1.2330 level, its 2008 swing low. This new price development is in line with our medium term bearish outlook target which now looks beyond the 1.2330 level. Breaking and holding below the 1.2766/06 levels on weekly closing basis will give us more confidence of a quicker return to the 1.2330 and beyond. This current downside view remains supported by its daily and weekly studies implying further weakness.Conversely,reversal of roles are now expected where 1.2706/66 area should now provide resistance. Above there though not expected as it will invalidate its present declines will suggest an upmove towards the 1.3000/1.2993 level, its psycho level/Feb 06'09 high with an extension towards its Feb 04'09/Nov 25'08 high at 1.3071/81.Further out, its Jan 27/28'09 highs at 1.3327/30 comes in as the next upside. On the whole, with a break of the 1.2766/06 zone now seen, odds now favour a recapture of the 1.2330 level.
1.2551 Dec 04'08 low
1.2330 2008 low
1.2706/66 Feb 02'09 low /Jan 23'09 low
1.3000/1.2993 psycho level/Feb 06'09 high.
1.3071/81 Feb 04'09/Nov 25'08
With the pair's declines off the 1.4986 level, its Feb 09'09 high not yet over , its nearby support at the 1.4137 level continues to feel the heat and is now under pressure of being invalidated. GBP was see retesting that level in early trading today. If this level is eventually taken out, we should expect GBP to target its Jan'2002 low at 1.4045 with a turn below there setting the stage for a run at the 1.3682 level, its Jun'2001 low and then its YTD low at 1.3504.Our bias remains for the latter level to give in and accelerate weakness lower. Its daily stochs continues to provide negative signals suggesting further declines. To the topside, its Feb 13'09 will be aimed at initially accompanied by the 1.4352 level, its Dec 31'08 low and then the 1.4578 level, its Feb 04'09 high. Above these key levels are required to signal a move towards the 1.4981/86 levels, its Jan 16'09/Feb 09'09 highs .We maintain our bearish medium and long term views on the pair and see it eventually taking the 1.3504 level out. All in all, having lost momentum at the 1.4986 level, GBP is now susceptible to the downside.
1.4137 Feb 12'09 low
1.4045 Jan'2002 low
1.3682 Jun'2001 low
1.4352 Dec 31'08 low
1.4578 Feb 04'09 high
1.4981 Jan 16'09 high
This report is prepared solely for information and data purposes. Opinions, estimates and projections contained herein are the author's own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed to be reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness and neither the information nor the forecast shall be taken as a representation for which the author incur any responsibility. The does not accept any liability whatsoever for any loss arising from any use of this report or its contents. This report is not construed as an offer to sell or solicitation of any offer to buy any of the currencies referred to in this report