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Tue, 27th of March, 2007 7:19 am EST
TODAY’S FOCUS: EURUSD & GBPUSD
EUR Bounces Off 1.3240/59 Zone

EURUSD-EUR short to the upside on Monday challenging the 1.3338/42 levels, its Mar 16 & 26’07 highs following a bounce from an intraday low of 1.3253.The pair remains constructive on the upside having formed a bullish engulfing candle pattern at the end of yesterday’s trading session suggesting that a convincing break of 1.3338/42 zone leading to gains towards its Dec 04’06 high at 1.3363 and a likely retest of its recent high at 1.3410 could be shaping up. In such a case, a break and close above there (1.3410) exposes the 1.3483 level, its Mar’05 high ahead of a stronger resistance at 1.3668, its Dec’04 high. In addition, its weekly stochastics remains supportive of this view. The first downside target is seen at its Jan 02’07 high at 1.3296 with a break opening the door for additional losses towards its .618 Ret(1.3071-1.3410 rally)/Dec 20’06/Feb 27’07 highs at 1.3240/59.If this zone gives way, then the next two downside targets lie at 1.3171/89 levels, its .618 Ret (1.2867-1.3363)/Feb 20’07 high and 1.3080/52 zone, representing its Feb 22’07 low/Dec 18’06 highs/range breakout point/Mar 06’07 low. On the whole, having pushed back above 1.3300/38 zone,EUR should now target 1.3363 and 1.3410 resistance zones.

Support Comments

• 1.3296 Jan 02’07 high
• 1.3230/59 Dec 20’06/Feb 27’07
• 1.3220/02 Broken trendline/.618 Ret(1.3071-1.3410)
• 1.3171/89 .618 Ret (1.2867-1.3363)/Feb 20’07 high

Resistance Comments

• 1.3363 Dec’06 high
• 1.3410 2007 high
• 1.3483 Mar’05 high
• 1.3668 Dec’04 high

GBP Pushes Towards 1.9700/26 Levels
GBPUSD-GBP like its EUR counterpart reversed off its intraday low at 1.9571 to close Monday session at 1.9693.It has in early morning trading today pushed lower towards 1.9620 levels signifying that a second failure in a week ahead of 1.9748/78 zone, its Feb 02 & 07’07 highs could be in the offing.GBP requires a decisive clearance of 1.9726,its Mar 22’07 high to establish that correction off its recent high at 1.9726 has ended at 1.9571 low and bring upside gains towards 1.9748/78 zone, its Feb 02 & 07’07 highs where a break must occur in order for the pair to resume its short term uptrend targeting its 2007/14-year highs at 1.9915 followed by its psychological resistance at 2.0000.Its weekly studies remain supportive of this view. On the downside, its initial support comes in at 1.9571/55,its Mar 26’07 low/Dec’04 high. Below here shifts focus to its daily 50 ema/Mar 16’07 high at 1.9507/05 with a violation of there clearing the way for more downside losses towards 1.9460, its Dec 18’06 low and then 1.9401/33 zone, its Feb 13 & 19’07 lows/ Mar 12’07 high ahead of its Mar’05 high at 1.9326.Daily stochstics is in an overbought territory suggesting nearer term upside limitation may be seen. On the whole, maintaining above 1.9552/05 zone calls for further upside pressure towards 1.9748/78 and beyond.

Support Comments

• 1.9571/55 Mar 26’07 low/Dec’04 high
• 1.9524/05 Falling Trendline/ Mar 16’07 high
• 1.9460 Dec 18’06
• 1.9401/33 Feb 13 & 19’07 lows/ Mar 12’07

Resistance Comments

• 1.9673/77 Feb 15 & 27’07 highs
• 1.9748/78 Feb 02 & 07’07 highs
• 1.9915 2007/14-year highs
• 2.0000 Psychological Resistance

Mohammed Isah
Market Analyst
FX Instructor LLC
misah@fxinstructor.com
www.fxinstructor.com

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