EURUSD: Breaks Back Above the 1.4159/62 zone, Eyes the 1.4250/81 Zone

EURUSD- A three- day run off the 1.4014 low printed on Oct 09'07 saw EUR breaking through the 1.4159/62 zone, its 1.618 Fib Ext (Daily Chart)/Oct 22'95/Sept 25'07 highs and testing 1.4240 level before closing Thursday trading session at 1.4194.This development now sets the pair up for a push above the 1.4200 and ultimately the 1.4250/81 levels, its 1.272 Ext. (monthly chart)/2007 peak. With bottoming at the 1.4014 level and subsequent upside gains signalling an end to its nearer term corrective weakness off the 1.4250/81 high, a clean penetration of there (1.4250/81) will keep the next two upside targets at the 1.4300 level, its psycho level and the 1.4535 area, its Mar'1995 high. The daily studies have turned higher indicating upside strength.Alternatively, the 1.4159/62 zone just eroded is now expected to provide support and turn the pair higher. Below here exposes the 1.4033/00 area, which represents its Oct 05 & 09'07 lows/psycho level at first and then the 1.3930/28 area, its .382 Ret (1.3361-1.4281)/Sept 13'07 high where a break could trigger additional losses towards the 1.3681/83 area, its April 30'07/Aug 24'07 highs. On the whole, having eroded the 1.4159/62 zone, EUR looks to recapture its year-to-date high at 1.4250/81.

GBPUSD: Turns Lower On A Rejection Candle Formation

GBPUSD-With a long-legged doji like candle printed on Wednesday after an unsustainable move above the 2.0461 level, its Aug 03'07 high, GBP saw a follow- through to the downside on Thursday with additional downside weakness seen in early morning trading today. This condition now leaves its July 30'07 low/Aug 27'07 high/broken falling trendline at 2.0191/81 to provide support with a breach of there if seen paving the way for further downside losses aiming at the 2.0132 level, its .50 Ret (1.9632-2.0652)/April 18'07 high and then the 2.0059/72 area, its April 25/26'07/May 01'07 high. The daily RSI and Stochastics remain supportive of this scenario. On the upside, the first target lies at the 2.0365 level, its Sept 12'07 high ahead of the 2.0319 level, its Sept 24'07 high followed by the 2.0461/94 levels, its Aug 03'07/Oct 01'07 highs. Above here will set the pair up for a push towards the 2.0585 level, representing its channel top and finally its 2007 peak at 2.0652.All in all, as long as the pair continues to trade within its daily rising channel, its short term trend points to the upside.