Its official - I am back from vacation from Buenos Aires and am engaging in this thing called work which is at the moment feeling like a Greek tragedy.  I love my work but its hard not to love a vacation like that more than my current predicament.  I am still getting up on Argentinian time (6hrs ahead of California) which translates roughly to 4am - a ghastly thought but a reality nonetheless.  Be that as it may, now that I am back, its time to start writing some articles and the markets are looking interesting, particularly with the GBPUSD pair.

A fall in the making?Only the NZDUSD and the GBPUSD get the honors of making new lows in 09 in comparison to the yearly lows of 08 against the greenback.  This is not an impressive club to be a part of and for now, we are suggesting trading the pair with the most inherent weakness agains the dollar, that being these two pairs.  Looking at the daily chart below, we can see how this pair has made a low this year roughly 10cents lower than last years and we are just getting out of January.  The Ichimoku cloud formation is not pretty by any means and does not signify too much a week or two from now except that price could oscillate a bit if it does not find a good direction soon.  However, we feel the direction in the short/medium term (days-few weeks) is to the downside as it is posting a miserable CCI which cannot make any real gains into the positive territory while momentum is also getting rejected at the zero line and cannot find any significant upward tread as well.  Both of these do not fare well from an oscillator/momentum standpoint.

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To make things a little more dreadful, using the charts below, we can see how the pair on Dec. 17th, 08′ started a new swing downward that started at 1.5721 and ended at 1.4387 (roughly 1350 pips later) and bounced to hit the cloud and barely eck past the 61.8fib retracement.  Like clockwork it went to the Fib projection at 1.618% at 1.3539 before bouncing a bit.

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That bounce indicated by the second chart below only managed to muster up a retracement just beyond the 50% fib at 1.4500 before getting slammed down 450 pips.  The current bounce off of 1.4050 has managed to impress on a short term intraday basis bouncing 220 pips posting 6 consecutive hourly blue candles.  This smaller retracement suggests the pair is likely to continue another swing to the downside and if the fib projection has anything to say about it, it shall land somewhere near 1.2569-1.2600 area giving us an opportunity to snag over 1600 pips from the current position.  We do not suggest selling at the present levels and rather feel it would be better to catch a rally up to 1.4500 again and look for the drop from there or wait till a close below 1.4000 happens and target 1.3500 for a short target and 1.2600 are for a longer target.

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