Week of April 20, 2009

EURUSD corrective rise from the March 4, 2009 low of 1.2455 is complete at the March 19, 2009 high of 1.3738 with prices currently trading within the 1.2945-1.3248 consolidation zone.  A daily open and close outside this zone will see further price extension with 1.2730 as the next downside target. As to the short term fall from the April 13, 2009 high of 1.3391, the fall remains active as ONLY a daily open and close above 1.3128 will complete this fall while today’s Asia low of 1.2966 holds. Intraday, look for prices to continue to move lower initially targeting 1.2945 as the next objective while 1.3128 caps.

GBPUSD rise from the March 30, 2009 low of 1.4110 will be complete with a daily open and close below 1.4701, with prices then continuing to move lower within a 1.4476-1.4110 before another attempt to the upside. However, until prices can sustain below 1.4527, medium term risk will remain the upside. As to the broad outlook, the trend remains firmly to the downside as ONLY a weekly open and close above 1.5475 will complete the fall from the September 25, 2008 high of 1.8666 at the January 23, 2009 low of 1.3502, with prices then continuing to move higher within a 1.5475-1.6693 consolidation zone before another attempt to the downside. Shorterm, the fall from the April 16, 2009 high of 1.5067 remains active as ONLY a daily open and close above 1.4804 will complete the fall with prices then continuing to move higher within a 1.4804-1.4905 consolidation zone. For the session ahead, look for GBPUSD to continue to move lower with 1.4589 and 1.4527 as the next objectives.