Daily Technical Strategist
Today's Focus: EURUSD & GBPUSD
- EURUSD: Higher Upside Gains Monday Looks To Strengthen Further.
- GBPUSD: Corrective Recovery Highlights The 1.7447 Level And Beyond.
EURUSD
EUR's decline off the 1.4867 level (Sept 22'08 high) to a low of 1.3259 may have temporarily halted as a one-day upside gain Tuesday looks to head further higher. This present price action is not unexpected as the pair has pushed its daily momentum indicators into oversold territory (after the mentioned decline) which now needs to unwind before its medium term downtrend will begin again. In such a case, the 1.3682/66 zone, its April'07/Dec'04 highs which is now being challenged needs to be taken to clear the way for further upside gains towards another strong resistance residing at the 1.3852/82 zone, its Sept 11'08 low/July'07 high. We view the latter level as formidable and expect it to cap upside incursions and turn the pair lower in alignment with its medium term downtrend. Initial support lies at its Dec'04 high/August'07 low at 1.3366/61 with a break of there setting the pair up for decline towards the 1.3312/1.3264 zone, its .618 Ret (1.1640-1.6038 rally)/Jun'07 low and then its YTD low at 1.3259 registered on Oct 10'08.In short, broader outlook remains to the downside implying its current upside gains remains corrective.
| Support |
Comments |
| 1.3366/61 |
Dec'04 high/August'07 low |
| 1.3312/1.3264 |
.618 Ret (1.1640-1.6038 rally)/Jun'07 low |
| 1.2980 |
Jun'06 high |
| Resistance |
Comment |
| 1.3682/66 |
April'07/Dec'04 highs |
| 1.3852/82 |
Sept 11'08 low/July'07 high |
| 1.4015 |
Oct'07 low |
| 1.4073 |
Sept 16'08 low |
GBPUSD
GBP has now embarked on a corrective upside recovery off its recent low at 1.6786 level printed on Oct 10'08 following its second leg of weakness started at the 1.8669 level in late Sept'08.The pair was seen attacking the 1.7447 level, its Sept 11'08 though this level is considered a strong support turned resistance, a cut through there on the mentioned corrective upside could open upside risk towards the 1.7735 level, its Sept 16'08 low followed by the 1.7840 level, its Oct 03'08 high. This scenario is consistent the current corrective price action supported by rising daily momentum indicators. While the levels between 1.7447 and 1.7840 cap upside gains, GBP is expected to turn back down and resume medium term decline towards its April'06 low at 1.7251 and the 1.6857 level, its June'03 high ahead of the 1.6786 level printed on Oct 10'08.Decisively penetrating and negating here will resume the pair's medium/longer term weakness with eyes on its .618 Ret (1.3682-2.1161 rally, monthly chart) at 1.6552 initially and the 1.6175 level, representing its Mar'03 high. On the whole, as long as 1.8091 or even 1.8669 lim its upside gains,the pair's medium outlook remains intact.
| Support |
Comments |
| 1.7447 |
YTD high |
| 1.7251 |
April'06 low |
| 1.7049 |
Nov'05 low |
| 1.6857 |
June'03 high |
| Resistance |
Comments |
| 1.7735 |
Sept 16'08 low |
| 1.7840 |
Oct 03'08 high |
| 1.8669 |
Sept 25'08 high |
Mohammed Isah
Market Analyst
www.fxtechstrategy.com
This report is prepared solely for information and data purposes. Opinions, estimates and projections contained herein are the author's own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed to be reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness and neither the information nor the forecast shall be taken as a representation for which the author incur any responsibility. The does not accept any liability whatsoever for any loss arising from any use of this report or its contents. This report is not construed as an offer to sell or solicitation of any offer to buy any of the currencies referred to in this report
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