Week of May 18, 2009

EURUSD continues to consolidate the medium term rise from the March 4, 2009 low of 1.2455 and the March 19, 2009 high of 1.3735 as a daily open and close above 1.3433 confirming the rise has once again resumed with 1.3854 as the next objective.  As to the downside, prices will need to open and close below 1.2888 to confirm the move lower initially targeting 1.2729 has resumed. Intraday, the rise from Friday’s 1.3227 low remains active while prices hold above 1.3300.  For the session ahead, look to buy EURUSD within the 1.3250-1.3287 zone with stop loss below 1.3224 for 1.3380 followed by 1.3433 initial targets.

GBPUSD remains in a corrective rise from the March 11, 2009 low of 1.3653 as only a daily open and close below 1.4467 will complete this rise while the April 16, 2009 high of 1.5067 holds. As to the broad outlook, the fall from the September 25, 2008 high of 1.8666 remains active as ONLY a daily open and close above 1.5475 will complete this fall while the January 23, 2009 low of 1.3502 holds.  For the session ahead, look to buy GBPUSD within the 1.4847-1.4873 zone with stop loss below 1.4811 for 1.4979 followed by 1.5067 initial targets.