EURUSD: With strength continued to be seen following its recent sharp rally, risk of further upside remains on the cards with 1.3738 level being targeted. As long as EUR maintains above its major emasand its broken declining channel, our outlook on the pair remains higher. Above the 1.3738 level will activate its short term recovery initiated at the 1.2456 level, its Mar 04’09 high towards its Jan 05’09 high at 1.3964.Beyond the latter will leave the pair aiming at the 1.4363 level, its Dec 29’08 high. However, on any pullbacks from its current price levels, the 1.3439 level which is the location of its 200 daily emawill be aimed with a loss there accelerating declines towards the 1.3385 level, its April 30’09 high ahead of the 1.3213 level, its May 04’09 low. On the whole, though correcting the pair’s outlook remains to the upside.

Support/Comments

1.3439 Daily 200 ema

1.3385 April 30’09 high

1.3213 May 04’09 low

Resistance/ Comments

1.3666 May 11’09 high

1.3738 Mar 04’09 high

1.3964 Jan 05’09 hig

GBPUSD:Overbought But Maintaining Overall Upside Tone.

GBPUSD: Although GBP is now hesitating which is supported by its overbought daily stochastics(a sign of temporary pullbacks), while holding above its ST rising trendline, bias remains to the upside. In such a case, its strong resistance at the 1.5373 level, its Jan 08’09 high will be targeted ahead of the 1.5440 level where its 200 daily emais located. Above the 1.5440 level will set the stage for a move towards the 1.5724 level, its Dec 17’09 high and possibly higher. Weekly studies are supportive of this view. On the other hand, following through on the mentioned overbought will put the next downside target located at the 1.5068 level, representing its April 16’09 high and the 1.4836 level, its May 04 09 low and then its April 27’09 low at 1.4517 level. Despite this downside scenario, we expect the 1.5068 level to initially provide support on any pullback thereby turning the pair higher again. All in all, with the continuation of its recovery off the 1.3655 level triggered, GBP should accelerate further higher.

Support/Comments

1.5066 April 16’09 high

1.4836 May 04 09 low

1.4517 April 27’09 low

Resistance/Comments

1.5373 Jan 08’09 high

1.5722 Dec 17’08 high

1.6671 Oct 30,08 high