EURUSD-EUR followed through to the upside yesterday but failed ahead of 1.3292 levels and subsequently collapsed to a low of 1.3158.This failure suggests that short-term downside pressure is still present in this pair as long as it holds below 1.3292 level, its Dec 12’06 and 1.3231 level, its .786 Ret. If further weakness is seen, then the next target to aim at will be its April’05 high/Dec 11’06 at 1.3126/30 with a break paving the way for a retest of its Dec18’06 low/MT rising tendline at 1.3086/52.A clearance of this level puts the next support at its Jun’06 high/psychological level at 1.3000/1.2981.This key support zone is expected to hold and put the pair back on the path to resuming its primary uptrend. On the upside, EUR should challenge its Dec’06 high at 1.3365 if it can overcome the hurdles presented by the 1.3219/31 levels, its Nov 28’06/.786 Ret and the 1.3292 level, its Dec 12’06.On a break of 1.3365, the pair’s technical upside target comes in at its range breakout price objective at 1.3405 followed by its April’05 high at 1.3482.Beyond here lies a stronger resistance at 1.3667 its Dec’04 high. The daily studies are still positive and point higher supporting this view. On the whole, a close above 1.3365 is needed to turn the pressure to the upside and set the stage for further upside gains.
Support
Comments
1.3130/1.3086
April’05 high/Dec 08’06/Nov 27’06 lows
1.3059
MT rising trendline
1.3000/1.2981
Psycho level/Jun’06 high
1.2901/39
Nov 10’06 high/Aug’06 high
Resistance
Comments
1.3219/31
Nov 28’06 high/.786 Ret(1.3667-1.1640)
1.3365
Dec’06 high
1.3405
Broader range breakout price target
1.3482
April’05 high
GBP Continues To Hold Below 1.9727
GBPUSD-GBP traded higher Wednesday testing 1.9727/48 highs before collapsing to a low of 1.9617.A successful violation of this zone (1.9727/48) would trigger further upside gains targeting its year-to-date high at 1.9848 with scope for price extension towards its psychological resistance at 2.000 ahead of its 1991/1992 highs at 2.0045/2.0110.Its daily studies and longer term charts remain in support of this view. On the other hand, a continued failure below 1.9727/48 levels could see the pair pushing lower towards its Dec’04 high at 1.9552 where a penetration if seen increases downside losses aiming at its Dec 08’06 low/.382 Ret/Nov 29’06 low at 1.9465/34 followed by its Mar’06 high/Nov 27’06 low at 1.9327/06. Key support level to watch for below here is at its April’05/Nov 10’06 highs at 1.9218/1.9177.On the whole,GBP’s long term trend remains to the upside but needs a decisive break and close above its Dec’06 high at 1.9848 to resume that uptrend.
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