EURUSD: Breaks To A New High, Aims At The 1.4535 Level

EURUSD- EUR continues to print new highs, closing for the seventh-day of consecutive upside gains to set a new 2007 high of 1.4503 on Wednesday. With momentum continuing to point to the upside, the 1.4535 area, which is the location of its Mar’1995 high remains at risk of being tested and eventually surpassed in the days and weeks ahead. Above there will call for further gains aiming at its psycho level at 1.4600.However,with the new high facing weakness below its rising channel top(Referenced in yesterday’s analysis) in early morning trading today, nearer term corrective bounce may be shaping up especially now that its daily momentum indicators are overbought, a sign that price may reverse. In that case, the 1.4342/63 zone, its Oct 22’07 high/1.272 Fib Ext. (daily chart) will initially be targeted followed by its 1.272 Ext. (monthly chart)/Sept 28 high at 1.4250/81 and then the 1.4162/39 area, its Oct 22’95/Sept 25’07 highs/daily rising channel. Further support stands at the 1.4033/00 levels, representing its Oct 05 & 09’07 lows/psycho level. On the whole,EUR remains clearly biased to the upside in both the medium and longer term and should head higher after any corrective pull back if seen.

Support Comments

1.4342/63 Oct 22’07 high/1.272 Fib Ext. (daily chart)

1.4250/81 1.272 Ext. (monthly chart)/Sept 28’07 high

1.4159/62 1.618 Fib Ext (Daily Chart)/Oct 22’95/Sept 25’07 highs

1.4033/00 Oct 05 & 09’07 lows/psycho level

Resistance Comments

1.4463/68 1.618 Fib Ext. /weekly rising channel top

1.4535 Mar’1995 high

1.4600 Psycho Level

GBPUSD: Sees Highest Price Since 1981, Eyes The 2.0929 Level

GBPUSD- Having pushed above its daily rising trendline and eroded the 2.0652/79 area, its channel top/July 24’07 high to set a new 26-year high at 2.0809 on Wednesday, GBP has now opened up scope for upside pressure towards its 1.272 Fib Ext at 2.0929 at first and next at the 2.0985 zone, its 1978 high with a loss of there aiming at the 2.1000 level, its psycho level. The daily and weekly studies remain supportive of this view though those of the daily are now in overbought territory.Alternatively, its eroded resistance at the 2.0652/79 area is now expected to reverse roles and provide support. If however a turn below there materializes, the 2.0461/94 levels, (Aug 03’07/Oct 01’07 highs) will come in as the next downside objective followed by its Sept 12’07 high at 2.0365 and then the 2.0319 level, its Sept 24’07 high. Breaking below there will put further downside pressure on its July 30’07 low/Aug 27’07 high at 2.0191/81.All in all, GBP now eyes higher prices having invalidated its key resistance levels at 2.0652/79.

Support Comments

2.0652/79 Channel Top/2007 Peak

2.0461/94 Aug 03’07/Oct 01’07 highs

2.0365 Sept 12’07 high

2.0319 Sept 24’07 high

Resistance Comments

2.0985 1978 high

2.1000 Psycho Level

2.1293 1.618 Fib Ext