Market Outlook – Eur/Usd – Gbp/Usd – 10th June 09

The past few weeks have been extremely profitable. This is due to clear market trend formations and even with limited technical analysis, one will be easily able to understand and accept the trends, easily following them along. The moves, both on the uptrend and downtrend, have been fairly large, ranging from a few hundred pips to about 250 pips on the Eur/Usd (for now) and more than 800 pips on the Gbp/Usd.

Unless you are a contrarian trader, (like I am!) you should have done far better than the minimal pips as mentioned above. In continuing to view the longer term trends, I believe that fundamentally, we are sound for more upside on the gbp/usd and eur/usd at this point in time.

Though not entirely cemented of an immediate upper level, I foresee that we should at least test or breach pre-NFP levels as of last week, by today. For the gbp/usd, there is further room on the upside for about 90 pips and about 150 pips for the eur/usd, at this point of time in writing, where both pairs are trading at about 1.6308 and 1.4067 respectively.

There is far less pressure on the Gbp and Eur to weaken, for the moment, when compared to the Usd. I would therefore expect more upside easily on the Gbp/Usd and Eur/Usd rather than Gbp/Jpy or Eur/Jpy. With continuing rises in price against Oil and Gold, with them being inversely related with Usd strength, there is further reason for decline of the Usd.

Eur/Usd

Technically, I don’t have much bias to feel that there is downtrend imminent or a reversal bound anytime soon. There could be signs of a reverse double bottom dating back from September 25th, last year, but it looks rather iffy and not very clearly defined. If this is to be, the previous high of 1.47 dating back to Dec last year can be tested. The upwards trend channel was broken last week, mainly caused by NFP news, but the price level seems to be getting back into the channel and this hopefully, would happen later today. In the immediate short term, the price level is currently resting well above the pivot level, but has an immediate fib resistance level at 1.4130, incidentally, which is just about the same level as the previous high of last week, pre-NFP level, which I feel that might be tested today. If this breaks and trends upwards clearly, the next immediate resistance will be our Dec high, at 1.47. As you can see, we have good steam to see this through and I hope this can bag us a few more hundred pips. Yeeehaawwww!

Eur/Usd Daily Chart Setup

Gbp/Usd

The Gbp/Usd studies show no signs of reversal as yet. Price level action is now testing resistance of the upward trend channel drawn from 4th-10th March and is just resting above the 36.2 fib level. We might see some retracement today due to large gains made yesterday, but I have no reasons, technical and fundamental, to opine that the uptrend move might have ended and there is no further upside. In the immediate short term, the price is just below the 61.8 fib level on an hourly TF, with the trend channel upper bound immediately above that. If these 2 levels clear easily, we could see the previous high of 1.66 being tested from 3rd June. Once again, there are a few more hundred pips to be made in this trend, as we see that it should continue.

Gbp Usd Daily Chart Setup

Once again, no one knows what the market can give us, so don’t over leverage, and always think that you might end up wrong. This way, you are always protected should the worst happen.

As usual, happy trading.
Seeni

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