EURUSD: Pressured To The Upside.
EURUSD: With a reversal of its Wednesday losses seen on Thursday, risk of further strength is likely though hesitating. In such a case, its May 06’2011 high at 1.4586 will be targeted and ultimately the 1.4938 level, its 2011 high.
EUR will have to cut through the latter level to resume its long term uptrend now on hold towards the 1.5140 level, its 2009 high. Its daily RSI is bullish and pointing higher suggesting further strength.
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Conversely, support lies at the 1.4345 level, its May 20’2011 high. However, the big risk to the pair’s present upside strength is for it to return below the 1.3970 level, its May 23’2011 low.
This will trigger the resumption of its weakness initiated from the 1.4938 level towards the 1.3852 level and possibly lower.
USDCHF: Threatens Further Weakness
USDCHF: The pair continues to face bearishness breaking below the 0.8463 level, its May 2011 low and threatening further weakness.
USDCHF is broadly biased to the downside in the long term and having tumbled off the 0.8946 level, its May 13’2011 low, that trend remains intact.
On further weakness, the 0.8400 and 0.8300 levels, representing its psycho levels will be targeted where a break will pave the way for a run at the 0.8200 level.
With the pair trading in an uncharted territory, the psycho levels present support levels. Its daily and weekly RSI are bearish and pointing lower suggesting further weakness.
On the upside, if any recovery, the pair’s nearby resistance and former support at the 0.9553 level, its May 05’ 2011 low should reverse roles as resistance and turn the pair lower in the direction of its primary trend (down).
However, if that level is taken out, we should see further strength building up towards the 0.8662 level, its May 27’2011 high where a breach will expose the 0.8946 level, its May 13’2011 high. A cap is expected at that level on an initial test.
All in all, USDCHF remains vulnerable to the downside in the long term as it continues to face further downside pressure.