January 20th, 2009

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.

More updates later.  RW