EURUSD fall from the December 18, 2008 high of 1.4718 remains active as ONLY a daily open and close above 1.3548 will complete this fall at 1.2824, with prices then continuing to move higher within a 1.3598-1.3994 consolidation zone before another attempt to the downside. However, a daily close above 1.3085 today will see prices continue to move higher in the near term with 1.3104 and 1.3171 as the next objectives, otherwise, downside risk remains. As to the downside, prices are presently consolidating this weeks 1.3385-1.2824 fall, as a 1 hour open and close above 1.3038 will complete the short term fall from 1.3385 at 1.2824, with prices subsequently moving within a 1.3038-1.3171 consolidation zone before another attempt to the downside, while a 1 hour open and close below 1.2923 will see furher downside momentum.
GBPUSD reached 1.3620 yesterday, 62 pips below our 1.3682 target sited in our August 26, 2008 outlook (Please read our August 26 update). The broad outlook remains to the downside for GBPUSD, as ONLY a monthly open and close above 1.5548 will complete the fall from the September 25, 2008 high of 1.8666, with prices then moving within an 1.5548-1.6738 consolidation zone before another attempt to the downside. As to the fall from the January 16, 2009 high of 1.4979, ONLY daily open and close above 1.4139 will complete this fall while 1.3620 holds, as prices will then continue to correct higher within a 1.4139-1.4468 consolidation zone before another attempt to the downside.
Stepping back and taking a look at the multi-year pattern of GBPUSD, the current move to the downside from the July 2008 high of 2.0155 is merely a resumption of the 2.4465-1.0345 (1980-1985) fall, as subsequent to that fall, prices have been essentially consolidating within the 1.5739-1.9071 multi-year consolidation zone, as risk remains for much further downside with a Yearly open and close below 1.3880 confirming further downside risk with 1.0345 as the objective.
January Outlook
Now, as to the present intra-day trading environment, low risk trade opportunities have been few in the past 2 weeks as the present week has been no different. What is occurring right now are short term moves which fail to sustain, with prices reversing intra day trends established in prior sessions. From July 15 -November 15 2008, there was a very strong trend providing favorable intra day and medium term trade opportunities as the intra day trends were well sustained throughtout the Asia, Europe and American sessions.
From December 2 thru December 18, there was a very strong correction sending the EURUSD higher with well sustained intra day trends. Similarly, there was a quick move lower in EURUSD which occurred primarily from January 2- January 6, again, supported by well sustained intra day trends throughout the sessions.
Then from January 12-16 there were very short term trade opportunities which failed to sustain throughout the subsequent sessions as prices would initially trend only to reverse in a subsequent session. On January 19-20, the EURUSD made a quick and well sustained move to the downside in very early Asia with essentially no correction as the pair continued to move lower. Since, there have been few sustained trends unfold providing few low risk trade opportunities. As to the outlook, until such time as the market begins to sustain trends, our strategy will require us to cover our positions quick so as to minimize risk. However, there is developing evidence , yet to be confirmed, that the next few days will see the EURUSD begin to unfold a well sustained trend thus providing a trend friendly environment for low risk profitable trades.
GBPUSD remains offered with the June 2001 low of 1.3682 as the next objective. This target was sited in our August 26, 2008 outlook (please read) as the eventual target based on our broad view remains 1.3682. As to the broad view, the fall from the September 21, 2008 high of 1.8666 remains active as ONLY a weekly open and close above 1.5797 will complete this fall. Similarly, EURGBP remains bid with a daily close above 0.9207 today completing the corrective fall from the December 30, 2008 high of 0.9803 at the January 9, 2009 low of 0.8836, with prices then moving within a 0.9207-0.9434 zone, as a sustained break of this zone will see further extension in the direction of the break. Look for a weekly close above 0.9434 to confirm further upside extension targeting 0.9825 in the days ahead.
EURUSD continues the medium term consolidation phase of the 1.2328-1.4718 rise, as mentioned in our last update, a sustained break of the 1.3241-1.3805 consolidation zone will see further extension in the direction of the break. Look for a daily open and close outside the above mentioned zone to confirm. As to the fall from the December 18, 2008 high at 1.4718, this wave remains active as only a daily open and close above 1.3672 will complete this fall while the january 15, 2009 low at 1.3025 holds. Intraday, today’s fall from the 1.3385 high remains active while prices remain below 1.3314, as a 1 hour open and close above 1.3314 will complete this intraday fall with prices then likely to continue to move higher within a 1.3314-1.3360 intraday consolidation zone before another attempt to the downside. Any break of the 1.3314-1.3360 intaday consolidation zone will see further extension in the direction of the break.
EURUSD remains in a broad consolidation phase from the 1.2328-1.4718 rise, as a sustained break of the 1.3241-1.3805 consolidation zone will see further extension in the direction of the break. Intraday prices continue to consolidate around 1.3400 with no clear intraday direction at this writing, with a sustained break of 1.3440 favoring a move towards 1.3538, while to the downside a sustained break of 1.3370 favors a move towards 1.3071.
GBPUSD broad trend remains to the downside with the June 1, 2001 low of 1.3682 as the objective while prices remain below 1.6000, as only a weekly close above 1.6000 will complete the fall from the September 22, 2008 high at 1.8641 while 1.4350 holds. Intraday risk remains to the downside with 1.4860 as the next objective, as a daily close below here will see prices continue to move lower targeting 1.4740, while to the upside a sustained move back above 1.5115 will see further upside extension towards 1.5176 followed by 1.5262.
EURUSD has continued to move lower towards our next objective at 1.3378, as a sustained break will see prices continue towards 1.3241 as the next objective. The intraday trend remains to the downside while prices hold below 1.3496, as a 1 hr open and close above 1.3496 will see prices continue higher within a 1.3496-1.3558 intraday consolidation zone before another attempt to the downside. As to the rise from the October 28, 2008 yearly low, this trend remains to the upside while prices hold above 1.3241, with a daily close today below 1.3467 favoring continued lower prices. While the short term trend remains to the downside, look to set EURUSD intraday shorts at 1.3531 with stop above 1.3560 for 1.3241 objective.
EURUSD continues to consolidate the recent 1.2549-1.4718 rise as a daily close below 1.3889 will see prices continue to move lower with 1.3634 as the next objective. as subsequent to a sustained move below 1.3889, look for prices to move within a 1.3378-1.3889 consolidation zone before another attempt to the upside. Intraday, prices are essentially trading within a 1.3850-1.4000 range with any break of this range witnessing further extension in the direction of the break. As to the broad outlook, a monthly open and close above 1.4033 will see prices continue to move higher in the weeks that follow, as January opened the month at follow, while to the downside a monthly close below 1.2886 favors further downside risk.
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