Forex Technical Analysis

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USD/JPY

Daily Analysis
09 May 2008
Current level - 103.56

The pair is in a corrective uptrend from the 95.75 short-term bottom. Technical indicators are rising slowly and the upmove is dynamically supported at 104.03. The inner structure of the rise is by all means a corrective one, so from a larger point of view the overall downtrend from 124.14 is not over yet.    

We still expect a downtrend to emerge, for a break below the 99.86 dynamic support, en route to 95.75.  Nevertheless the uptrend on the lower time-frames is still intact, so only below 100.82  will be confirmed, that the outlook is totally bearish for 95.75.

Tuesday's high at 105.59 has the potential to become a significant top , but confirmation will come below 100.82. Intraday we will expect acceleration of the downtrend with targets around the 102.68 support zone.

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GBP/USD

Daily Analysis
09 May 2008
Current level- 1.9534

The pair has reversed at 1.9337 and the technical indicators are rising and convergent. Trading is situated between the 50-day MA, projected at 1.9741 and the 200-day SMA, at 1.9925.
   
After last week's break below 1.9782 crucial support it became clear, that  the bigger corrective construction from the 2.0397 top is not yet finalized and new bottom below the 1.9599 low is to be expected. This doesn't change much our short-term view (for one more leg upwards to 2.0397 and 2.0531), but has postponed our expectations for a forthcoming test of the 2.0196 resistance zone. 

Nothing more than a retest of the already broken dynamic support at 1.9638 is what happened yesterday, after the BoE interest rate announcement, so  the final dip to 1.9431 can not be ruled out yet. We  will establish shorts with tight stop at 1.9571 and a target at 1.9446. If  stop is taken out  will wait for the first reaction from the 1.9647-53 resistance.