Week of February 12, 2009

EURUSD continues to see lower daily highs and higher daily lows with a breakout imminent within the next few days.  Rising trendline support comes in at 1.2790 today while to the upside, descending trendline resistence comes in at 1.2963. The convergence of the two above mentioned trendlines occurrs in 7 days at which time a breakout must occurr. To the upside, look for a daily open and close above 1.2963 to favor further upside potential with 1.3208 as the initial target while to the downside, a daily open and close below 1.2790 will see prices continue lower towards 1.2626 followed by 1.2553.  However, divergence with daily oscillators suggest downside momentum is waining for now and will need to be watched closely in the days ahead.

GBPUSD corrective rise from the January 23, 2009 low at 1.3502 is complete at 1.4984. as prices have since moved within the 1.4068-1.4418 consolidation zone. To the upside, a daily open and close above 1.4614 will see further upside extension intially targeting the daily 55 EMA currently at 1.4797 followed by descending trendline resistance currently at 1.4919, while to the downside, a daily open and close below 1.3819 will see further downside risk towards the 2009 low at 1.3502.

More updates later. RW