Daily Technical Strategist

Daily Forex Technicals | Written by FXTechstrategy | Feb 06 09 13:26 GMT |

Today's Focus: EURUSD & EURGBP EURUSD: Downside Vulnerability Remains In Progress. EURGBP: Triggers The Resumption Of Its Short Term Downtrend. EURUSD A follow through to the downside on its Wednesday sell off saw the pair test a low of 1.2761 before closing at 1.2789 on Thursday. The immediate risk is for the pair to retest and decisively break the 1.2766 level, its Jan 23'09 low ahead of the 1.2706 level and then the 1.2551 level, its Dec 04'08 low .On overcoming these hurdles, EUR should target its 2008 swing low standing at 1.2330.Our broader(MT) view is for a sustained break of that level accelerating further downside weakness towards its Feb'06 low at 1.1824. On the upside, a return back above its Nov 25'08 high at 1.3081 followed with a close above the 1.3298/1.3313 zone, its Jan 06'09 low/Oct 30'08 high will be required to prevent its current downside threats and bring gains towards its Nov 25'08 high at 1.3081 and then the 1.3298/1.3313 zone, its Jan 06'09 low/Oct 30'08 high. On the whole, while price action points lower and remains within the declining channel, EUR risk further downside weakness. Support Comments 1.2766 Jan 23'09 low 1.2551 Dec 04'08 low 1.2330 2008 low Resistance Comments 1.3070/81 Channel Top/Nov 25'08 high 1.3298/1.3313 Jan 06'09 low/Oct 30'08 high 1.3386 Jan 19'09 high EURGBP A clean cut through its Jan 09/16'09 lows at 0.8844/38 Thursday has seen the cross resuming its short term declines initiated at the 0.9803 level to close the session at 0.8744.It was seen heading further lower today testing a low of 0.8663 which also represents its Nov 13'08 high. This is a very significant level and if a loss of there occurs, the cross could decline to as low as the 0.8569 level, its Nov 17'08 high where an invalidation could trigger additional weakness towards the 0.8236 level, its Nov 28'08 low. This level if seen is expected to cap declines and put the pair on the path to corrective recovery. Its daily studies are trending lower supporting the present weakness. To the topside, its just eroded support at the 0.8844/38 level is now expected to reverse roles and provide support. Further out, resistance level are located at the 0.9128/24 area, its Jan 14/13'09 highs before its Jan 20'09 high at 0.9325 and next its swing high at the 0.9521 level, its Jan 26'09 high. Above the latter level will expose its 2008 high at 0.9803.On the whole, having convincingly taken out the 0.8844/38 level,EURGBP is now expected to head further lower. Support Comments 0.8663 Nov 13,08 high 0.8569 Nov 17'08 high 0.8236 Nov 28'08 low Resistance Comments 0.8844/38 Jan 09/16'09 lows 0.8752 50 Ret(0.7694-0.9803 rally) 0.9128/24 Jan 14/13'09 highs 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