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GBPJPY: Maintains Recovery Tone

GBPJPY – The cross remains biased to the upside on a corrective recovery breaking and closing slightly above the 134.01 level, its May 11’2011 high on Tuesday.

Though it continues to retain its recovery tone triggered from the 130.25 level, it requires a convincing break and hold above the 134.01 level to set the stage for further gains towards the 136.97 levels, its April 28’2011 high.  A loss of there will signal a return to its 2011 high at 139.99 level.

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This development if seen will resume its medium term uptrend and pave the way for additional strength towards the 142.00 level, its psycho level with a break extending further gains towards the 145.95 level, its April 2010 high.  Its daily RSI is bullish and pointing higher supporting this view.

Conversely, on any pullback from its present price levels, the 132.68 level, its May 27’2011 low will be targeted ahead of the 131.25 level, its May 23’2011 low and subsequently the 130.25 level, its May 13’2011 low.

All in all, GBPJPY continues to retain its corrective recovery tone set from the 130.25 level.

EURUSD: Bullish Recover Remains Intact.

EURUSD: We continue to retain our bullish outlook on EUR and look for it to strengthen further in the days ahead. Though holding above the 1.4441 level, its May 09’2011 high, a close above that level on a daily basis will build more confidence.

Further out, resistance stands at its May 06’2011 high at 1.4586 and ultimately the 1.4938 level, its 2011 high. The pair will have to cut through the latter level to resume its long term uptrend now on hold.

Its daily RSI is bullish suggesting further strength. 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 back 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.