Week of January 12, 2009

EURUSD remains in a broad consolidation phase from the 1.2328-1.4718 rise, as a sustained break of the 1.3241-1.3805 consolidation zone will see further extension in the direction of the break.  Intraday prices continue to consolidate around 1.3400 with no clear intraday direction at this writing, with a sustained break of 1.3440 favoring a move towards 1.3538, while to the downside a sustained break of 1.3370 favors a move towards 1.3071.

GBPUSD broad trend remains to the downside with the June 1, 2001 low of 1.3682 as the objective while prices remain below 1.6000, as only a weekly close above 1.6000 will complete the fall from the September 22, 2008 high at 1.8641 while 1.4350 holds. Intraday risk remains to the downside with 1.4860 as the next objective, as a daily close below here will see prices continue to move lower targeting 1.4740, while to the upside a sustained move back above 1.5115 will see further upside extension towards 1.5176 followed by 1.5262.

More update later. RW