Week of Febraury 21, 2010

FOR THE WEEK OF FEBRUARY 21-26, 2010
EURUSD
EURUSD continued to move lower last week as our forecast targeted 1.3418 with prices reaching 1.3444, a few pips shy of our objective.

The BROAD OUTLOOK at this juncture remains corrective as the rise from the April 22, 2009 low of 1.2885 is complete at November 2009 high of 1.5143, with prices currently sustained below the 1.3748-1.4280 previously sited consolidation zone. A previously sited, a daily open and close below 1.3748 will see further downside extension as we saw this unfold last week, but at this juncture daily prices will need to open and close below 1.3418 to confirm further downside extension targeting the April 22, 2009 low of 1.2885. As to the upside, ONLY a daily open and close above 1.4092 will complete the corrective fall from the November 2009 high of 1.5143 while last weeks 1.3444 low holds, as price will then continue to move higher within a 1.4092-1.4492 consolidation zone .

As to the MEDIUM TERM OUTLOOK, the fall from the January 13, 2010 high of 1.4579 remains active as ONLY a daily open and close above 1.3878 will complete this fall while last weeks 1.3444 low holds, as prices will then continue to move higher within a 1.3878-1.4145 consolidation zone before another attempt to the downside. As always the case, once prices have moved within the sited consolidation zone, a sustained break of the sited consolidation zone will see further price extension in the direction of the break.

The SHORT TERM fall from the February 17, 2010 high of 1.3788 is complete at 1.3444, as hourly prices have opened and closed within the 1.3525-1.3657 consolidation zone with risk for further consolidation within the above mentioned zone before another attempt to the downside. Failure to move back below 1.3525 will favor further rise with 1.3657 followed by 1.3786.

TRADE RECOMMENDATION Buy EURUSD within the 1.3510-1.3555 zone, stop loss below 1.3485 for 1.3878 initial target followed by 1.4011.

GBPUSD
GBPUSD continued to move lower last week as our forecast targeted 1.5407 with prices exceeding our target reaching 1.5345.

The BROAD OUTLOOK remains corrective as the rise from the April 22, 2009 low of 1.4396 is complete at the August 2009 high of 1.7042 as prices remain within the sited 1.5407-1.6031 consolidation zone.

As to the MEDIUM TERM OUTLOOK, the active wave from the January 19, 2010 high of 1.6457 continues to unfold reaching 1.5345 last week and ONLY a daily open and close above 1.5770 will complete this fall while 1.5345 holds, as prices will then move within a 1.5770-1.6032 consolidation zone before another attempt to the downside.

The SHORT TERM OUTLOOK remains offered as the fall from the February 17, 2010 high of 1.5815 has reached 1.5345 as ONLY a 2 hour open and close above 1.3525 will complete this fall while 1.5345 holds, as prices will then continue to move higher within a 1.5525-1.5635 consolidation zone.

AUDUSD
AUDUSD continued to move higher last week reaching .9036, a few pips shy of our .9042 target sited in our February 14, 2010 update.

The BROAD OUTLOOK remains corrective as the fall from the January 2010 high of .9329 is complete at the February 5, 2010 low of .8577, as prices have moved within the .8864-.9042 consolidation zone. Look for a daily open and close outside this zone to witness further price extension in the direction of the break.

Both the MEDIUM TERM and SHORT TERM OUTLOOK remain bid as the rise from .8577 remains active as ONLY a 2 hour open and close below .8861 will complete this rise while .9036 caps, as prices will continue to move lower within a .8752-.8861 consolidation zone before another attempt to the upside.

TRADE RECOMMENDATION Look to buy AUDUSD within the .8806-.8861 zone, with stop loss below .8752 for 9042 followed by .9152 target.