GBPUSD: Bullish, Threatens The 1.6516 Level
GBPUSD: As bullish pressure continues to build up, further upside risk is expected to target the 1.6516 level, its May 11’2011 high.
This is coming on the back of a recovery rally started from the 1.6056 level on May 24’2011.
With that said, to convince the market that a resumption of its long term uptrend is building up, the pair will have to break and hold above the 1.6516 level. This will set the stage for further strength towards the 1.6743 level and then the 1.6877 level, its Nov’2009 high.
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A loss of the latter level will pave the way for more price extension towards its bigger resistance at the 1.7039 level, its 2009 high. Its daily RSI is bullish and pointing higher suggesting further strength.
Alternatively, in the absence of the above view, risk of a decline back towards the 1.6056 level, its May 24’2011 low cannot be ruled out with a break paving the way for a run at the 1.5935 level, its Mar 28’2011 low.
USDCAD: Hesitant But Bullish.
USDCAD: We continue to retain out bullish bias on USDCAD despite its present price hesitation.
As long as the pair continues to retain most of its recovery strength started from the 0.9445 level in early May’2011. While the 0.9709/20 zone hold as supports, our upside view remains valid.
A cut through the 0.9800 level and the 0.9845 level will set the stage for additional strength towards the 0.9967 level, representing its long term falling channel top (visible on the weekly chart).
Its daily stochasticsis bullish and pointing higher supporting this view. Alternatively, in case of a pullback, the 0.9709/20 zone will be aimed at ahead of its May 20’2011 low at 0.9639 where a break will open the door for further declines towards the 0.9511 level, its May 11’2011 low.
We expect that level to hold and turn the pair back up, but if it snaps, the 0.9446 level, its 2011 low will be targeted.
All in all, USDCAD remains biased to the upside on corrective recovery of its recent long term weakness though it is hesitating.
