Daily Technical Strategist

Daily Forex Technicals | Written by FXTechstrategy | Sep 23 08 13:35 GMT |

Today's Focus: EURUSD & GBPUSD EURUSD: Loss Of The 1.4542/71 Levels Highlights Further Corrective Gains Towards 1.4951/67 Zone. GBPUSD: Loss Of Momentum May Weigh On GBP As It Eyes The 1.8795 level. EURUSD Break and close above the 1.4542/71 zone (Aug 26'08/Sept 18'08 lows) has now paved the way for further corrective strength towards its Nov'07/Feb'08 congestive highs at 1.4951/67.Although pullbacks were seen in early trading today, that remains corrective of its current recovery off its YTD low at 1.3882.While price stalls could be expected at the 1.4951/67 levels due to its significance, successively breaking through there will open up upside risk towards its May/Jun'08 lows at 1.5263/85.The daily studies are bullish and trending higher supporting its current nearer term recovery.However,as long as the two earlier mentioned strong resistance zones are unbroken, EUR should end its present upside incursions and turn lower again in line with its medium term bearish outlook. Its invalidated resistance at the 1.4542/71 zone (Aug 26'08/Sept 18'08 low) should now reverse roles and provide support where a failure if seen should trigger lower prices towards the 1.4366/10 zone, its Jan'08/Dec'07 lows ahead of its Sept 16 low at 1.4073 and subsequently the 1.4015 level, its Oct'07 low. Below the latter will turn attention to its July'07/Sept'08 lows at 1.3882/52.On the whole,EUR's recovery strength is likely to stall at or ahead of the 1.4951/67 levels or even the 1.5263/85 zone with lower prices expected to follow. Support Comments 1.4542/71 Aug 26'08/Sept 18'08 low 1.4366/10 Jan'08/Dec'07 lows 1.4073 Sept 16 low 1.4015 Oct'07 low Resistance Comment 1.4867 Sept 22'08 1.4951/67 Nov'07/Feb'08 congestive highs 1.5263/85 May/Jun'08 lows GBPUSD GBP opened strongly higher (1.8841) building on its Friday gains to close Monday session higher at 1.8569 and setting the stage for a run at the 1.8795/1.8802 levels, marking its Aug 26'08 high/.50 Ret (2.0157-1.7447 decline).We see the pair encountering strong over head supply here as a combination of the two mentioned resistance level should force the GBP lower and activate its medium term decline again. Price objectives above here are located at the 1.8836 level, its Nov'06 low and the 1.9122 level, its .618 Ret. On the other hand, the 1.8482 level, its .382 Ret is now expected to reverse to support after losing its role as resistance. Cutting through this level could accelerate further declines towards the 1.8277/44 zone, which represents its Sept 17 & 18'08 highs ahead of the 1.8128 level (Sept 15'08 high) followed by the 1.7976 level (Sept 08'08 high) and then its YTD low at 1.7447.All in all, GBP may have enjoyed a run off the 1.7447 level but while overhead resistance that runs through the 1.8795 and 1.8802 levels are maintained, its medium term decline is expected to take hold. Support Comments 1.8482 .382 Ret 1.8123 Sept 15'08 high 1.7976 Sept 08'08 high 1.7447 YTD high Resistance Comments 1.8841 Sept 22'08 high 1.8795/1.8802 Aug 21'08 high/.50 Ret (2.0157-1.7447 decline). 1.9122 .618 Ret 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