EURUSD-After pushing to a high of 1.3176 in early morning trading Wednesday, EUR failed to hold on to its gains and later collapsed to a close of 1.3121 below its ST rising trendline.Although a follow-through to the downside on closing basis is required to confirm a convincing trendline break has occurred, as long as the pair is unable to break above its .786 Ret/Dec 12’06 at 1.3231/92,downside pressure initially targeting its 50 ema/.38 Ret (1.2761-1.3365 rally) at 1.3041/37 is expected ahead of its Jun’06 high/psychological level at 1.3000/1.2981 where a violation if seen could cause further downside pressure targeting its Nov 10’06/Aug’06 highs at 1.2901/39.The daily RSI and weekly stochastics remain positive supporting this view. On the upside, a successful clearance of1.3231/92 levels, its .786 Ret/Dec 12’06 will set the stage for more upside gains aiming atits year-to-date/20-month highs at 1.3365 with scope for extension towards 1.3405 level, its range breakout price objective before its Mar’05 high at 1.3482.Above here puts the next upside resistance at its Dec’04 high at 1.3667.On the whole, holding below 1.3231/92 levels puts short term pressure on this pair to the downside.
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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 Still Confined To Its Range
GBPUSD-GBP like its EUR counterpart also failed above 1.9600 level on Wednesday and reversed almost all its intra-day gains to close within its short term trading at 1.9565.The range top/Dec 13 & 20’06 highs at 1.9722/48 needs to give way to pave the way for upside gains towards its 14-year high at 1.9848 printed in Dec 01’06 followed by its range breakout price target/psychological resistance at /1.9990/2.000 ahead of its 1991/1992 highs at 2.0045/2.0110. On the downside, its first target is seen at 1.9552, its Dec’04 high with a break and close shifting the focus to its Dec 08’06 low/.382 Ret/Nov 29’06 low at 1.9465/29.Further out, more weakness should see the pair push lower towards its Mar’06 high/Nov 27’06 low at 1.9327/06 ahead of a stronger support zone at 1.9218/1.9177,its April’05/Nov 10’06 highs. In addition, the daily studies remain negative. On the whole, as long as GBP can hold above 1.9218/77 levels, its longer term trend remains to the upside
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