Still On Corrective Course Nearer Term

GBPUSD: With a failure at the 1.6620 level, its Jun 11’09 high activating declines on Friday and following through Monday, GBP continues to maintain its corrective downside bias in the nearer term. This suggests that further downside price follow through could target the 1.6000 level where its psycho level is located ahead of another strong support standing at the 1.5801 level, its Jun 08’09 low. We envisage that a cap at these levels thereby turning back the pair higher again but if a failure of that zone occurs scope for further price declines will turn towards its daily 200 emacurrently at 1.5578. Its daily studies are supportive of this view as they are heading lower. Upside targets are situated at the 1.6398 level, its Nov 03’09 high and its 2009 high resting at 1.6662 where a break and hold above the latter will clear the way for the resumption of its medium term uptrend towards the 1.7000 level, its psycho level. All in all, though presently undergoing corrective price activities in the nearer term, GBP remains biased to the upside medium term.

Support Comments
1.5801 Jun 08’09 low
1.6085 May 27’09 high
1.6000 Psycho level

Resistance Comments
1.6398 Nov 03’09 high
1.6662 2009 high
1.7000 Psycho level

EURUSD: Trading At A Critical Zone.

EURUSD: While EUR is tracing out a head and shoulder chart pattern and maintaining its nearer term corrective weakness, potential for additional lower prices continues to be seen. This now puts the 1.3738 level, marking its Mar 19’09 high under pressure though it was seen turning higher ahead of there in early trading today. We still envisage that this level should hold and preserve the pair’s medium term uptrend now on hold. But a decisive invalidation of there will reverse that view and put the pair in position to head further lower towards its daily 200 emaat 1.3548 level. Its daily stochastics and RSI are negative and pointing lower suggesting further downside weakness. Resistance lies at 1.4000 level, its psycho level with a turn above there leaving the 1.4338 level, its 2009 high being targeted. Beyond there will activate the resumption of its medium term uptrend and clear the way for a run at the 1.4718 level, its Dec 18’08 high ahead of the 1.4864 level, marking its Sept 22’08 high. On the whole, although EUR continues to see weakness in the nearer term, it remains corrective of its MT uptrend.

Support Comments
1.3805 Jun’09 low
1.3738 Mar 19’09 high
1.3548 Daily 200 ema

Resistance Comments
1.4267 Jun 05’09 high
1.4363 Jun 2’09 high
1.4718 Dec 18’08 high