EURUSD: Seen Testing Its Declining Channel Top.

EURUSD: Price follow through on Wednesday saw the pair hitting the top of its declining channel top before closing at 1.3280.That resistance level is now expected to turn EUR back down. This view is supportive of the pair’s declines activated at the 1.3738 level, its Mar 23’09 high. However, if a break and close above there(channel top) occurs,wecould see its recovery continuation towards the 1.3443 level which is the location of its daily 200 emawith a break of there triggering further upside towards its April 06’09 high at 1.3580. Supports are located at the 1.3113 level, its Mar 30’09 low and the 1.3097/93 area, its Feb 09’09 high/.50 Ret (1.2456-1.3738 rally) ahead of the 1.2991 level, its Feb 23’09 high with a clearance of the latter paving the way for a decline towards its Mar 16’09 low at 1.2833.Below there will open the door for further decline towards the 1.2456 level, its Mar 04’09 high enroute to its 2008 low at 1.2330. On the whole, with the pair holding within its declining channel, continuation of its weakness triggered at the 1.3738 level is likely.

Support /Comments

1.3320 Falling channel top

1.3443 Daily 200 ema.

1.3580 April 06’09 high

Resistance/ Comments

1.3113 Mar 30’09 low

1.3097/93 Feb 09’09 high/.50 Ret(1.2456-1.3738 rally)

1.2991 Feb 23’09 high

Threats Remain To The Downside.

USDCAD: As a challenge on the 1.1995/82 zone, its April 16’09 low/daily 200 emawas seen on Wednesday and a continuation of that weakness saw the pair weakening in early trading today, risk of a decline towards the 1.1771 level, its Jan 07’09 low is now shaping up. This view is consistent with its declines triggered off the 1.3064 level in early Mar’09.Next support lies at the 1.1464 level, its Nov 05’09 low. Additional evidence is being provided by its daily momentum indicators which are bearish and trending lower. On the upside, initial resistance lies at the 1.1995/82 zone ahead of the 1.2192 level, its Mar 19’09 low followed by the 1.2335 level, its daily 50 emabefore the 1.2506 level and then the 1.2712 level, its April 01’09 high. We retain our short term bearishness on the pair.Onthe whole, USDCAD has resume its weakness off the 1.3064 having taken out the 1.1981/95 area.

Support /Comments

1.1771 Jan 07’09 low

1.1464 Nov 05’09 low.

1.1304 Oct 14’09 low

Resistance/ Comments

1.1981/95 April 16’09 low/daily 200 ema

1.2071 April 24’09 low

1.2192 Mar 19’09 high