Week of March 20, 2009

EURUSD’s medium term impulsive wave from the December 12, 2008 high of 1.4718 is complete at the March 4, 2009 low of 1.2455 as yesterday’s daily open and close above 1.3319 confimed completion of the above mentioned wave with prices currently trading within the 1.3319-1.3854 consolidation zone. Now that daily prices have closed within the 1.3319-1.3854 consolidation zone, a daily open and close outside this zone will see further price extension in the direction of the break.  As to the corrective wave from 1.2455, ONLY a daily open and close below 1.3248 will complete this rise while yesterday’s 1.3738 high caps.  For the session ahead, look for bids ahead of 1.3600 to hold with prices then continuing to move higher with 1.3854 as the next objective.  Below 1.3540 will take the intraday pressure off the upside with risk for further price extension to the downside.

GBPUSD’s impulsive wave from the February 9, 2009 high of 1.4984 is complete at the March 11, 2009 low of 1.3502 as yesterday’s daily open and close above 1.4161 completed this fall with prices continuing to move higher reaching 1.4595 during yesterday’s US session.  Short term risk remains to the upside while prices hold above 1.4306 with 1.4660 followed by 1.4984 as the next objective.  As to the broad outlook, the trend remains firmly to the downside as the impulsive wave from the September 25, 2008 high of 1.8666 remains active as ONLY a weekly open and close above 1.5475 completes this fall while the March 2009 low of 1.3502 holds. For the session ahead, look for bids ahead of 1.4428 to hold with further price extension to the upside targeting 1.4660 as the next objective, however, a 2 hour open and close below 1.4306 will take the intraday pressure off the upside.

We will have a detailed outlook for the week ahaead after today’s close.  RW