EURUSD-Following its Monday gains after its recent decline to a low of 1.2482,EUR followed through to the upside yesterday putting in a second day of higher gains.However,such gains were limited to 1.2560/64 levels, the current location of its 200 ema and its July 26’06 low. As indicated in yesterday’s analysis any move towards 1.2560/1.2615 are seen as corrective as further losses to the downsides are expected towards 1.2477/59, its Jun/July’06 lows/bottom of the broader range. If a break of these levels occur then 1.2333/25 zone, its Jan/April’06 highs is exposed ahead of 1.2210, its Mar’06 high. Although this view is supported by longer-term momentum studies, nearer term, consolidation to correction towards the 1.2560/1.2615 levels could be seen in reaction to the oversold condition displayed on the daily chart. Overall, a failure at 1.2560/1.2615 levels is expected to trigger further downside price losses.
Support Comments 1.2459/77 Jun/July’06 lows 1.2333/25 April 19'06 low 1.2210 Mar’06 high 1.2068 April 12’06 low
GBPUSD-GBP sold off for the second day yesterday breaking above its Sept’06 lows/100 ema and testing 1.8700/33 levels. This is coming on the heels of its Monday gains. The above levels are within the vicinity of its .50 Ret at 1.8702 of its recent decline/.382 Ret at 1.8723 of its late Sept’06 high. With these gains seen as corrective moves, a failure at these levels is likely to push the pair lower initially towards its recent low at 1.8511 followed by 1.8384, its July 25’06 low ahead of 1.8175, its July’06 low. While the daily momentum studies remain in support of the present price gains, longer-term momentum still points lower suggesting that further price losses are possible. On the whole, GBP looks to push prices to the downside after its correction as its outlook still remains negative.
Support Comments 1.8602/32 Sept 29’06 lows 1.8492/1.8513 .618 Ret/Oct 10’06 low 1.8389 July 26’06 low 1.8175 July’06 low
Mohammed Isah Independent Analyst Exclusively for Spencer Financial LLC misah@spencerfx.com
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