Week of February 19, 2009

EURUSD broke trendline support on Tuesday as prices continued to move lower reaching 1.2512 yesterday.  This rising trendline from the October 28, 2008 low of 1.2338, now resistance, comes in today around 1.2750 today. Look for a retest of this level as a daily close above suggest prices will continue to move higher with 1.2981 as the next objective.  As to the corrective rise from the February 18, 2009 low of 1.2512, only a daily close below 1.2662 will complete this rise with prices subsequently moving into a 1.2602-1.2662 consolidation zone before another attempt to the upside. As to the medium term outlook, EURUSD’s fall from the December 12, 2008 high of 1.4718 remains active as ONLY a daily open and close above 1.3355 will complete this fall while 1.2512 holds, as prices will then continue to move higher within a 1.3355-1.3875 consolidation zone before another attempt to the downside.

GBPUSD fall from the February 9, 2009 high at 1.4984 reached a low of 1.4093 on February 18, 2009, as a daily open and close above 1.4433 will complete this fall at 1.4093 with prices subsequently moving higher within a 1.4433-1.4644 consolidation zone before another attempt to the downside. As to the active corrective rise from yesterday’s 1.4093 low, only a daily close below 1.4311 will complete this rise with prices then continuing to move lower within a 1.4228-1.4311 consolidation zone before another attempt to the upside.

We will have further update after Friday’s close. RW