August 13, 2008-American Session Update-13:00 GMT

Our outlook remains unchanged for GBP as the current move on the GBP is definitely impulsive favoring further GBP weakness into the weeks ahead. GBPUSD next target is the 61.8% of the 1.7048-2.1160 rise at 1.8619, as this has been our objective since prices closed below 1.9589 (38.2%) back in June. As to EURUSD, the broad trend from the November 2005 low at 1.1642 remains active and ONLY a weekly open and close below 1.4358 will confirm the rise from 1.1642 is complete at 1.6037. However, the medium term trend and as of this writing, the intraday trend remain down on the EURUSD, as only a daily close above 1.5282 will complete the fall from 1.6037 at 1.4816 (yesterdays low).

Additionally, there is mounting evidence that we may be in the very early stages of a broad USD rally which will continue beyond 2009. We discussed this possibility in yesterday’s 8:00 GMT blog.

For the session ahead, we favor selling GBP against anything, as we have have several GBP pairs which we are evaluating as well as selling EURUSD. Bid, we look for buying USDCHF, EURGBP and USDCAD. So, EURUSD, GBPUSD, EURGBP, GBPCHF, USDCHF, and USDCAD all have well defined intraday trends which also line up with the current medium term trends, as we will look for trade opportunities with these pairs during the session ahead, once confirmed.

More updates later.

Forex Signals Plus, RW