Daily Technical Update
January 27, 2010
(GBP/USD) Adjustment to Ranging Mode was Correct



* 4H and 1H: The latest adjustment for GBP/USD was to turn the short-term outlook from bearish to ranging. The EUR/USD had a stronger bearish indication through yesterday’s price action. (Refer to Daily Technical Update 1.26.2010 GBP/USD, 1.26.2010 EUR/USD).
* The range is roughly between 1.6100 and 1.6270. The market’s very weak second attempt to retest 1.610 should have cautioned against even the conservative bearish outlook to 1.6050.
* The market is now at 78.6% retracement. There is still a chance for another swing up towards the 1.6270 resistance.


(EUR/USD) Projecting Bearish Continuation



* 4H and 1H: The EUR/USD price action is suggesting a more bearish mode than the GBP/USD. There might be some pause in the US session at it tests short-term support at 1.4030.
* The 4H stochastic is showing continuation of bearish momentum as it turns back into the oversold zone. A swing projection of this scale goes to 1.37.
* 1H: However, the price action has not been very strong after the break of upsloping trendline. Perhaps this is due to the bullish forces at 1.4030. A break below 1.40 will provide strong confirmation of bearish continuation to the 1.37/38 projection.
* Daily: The daily chart reminds of the higher degree swing projection which goes to 1.37 as well. This is 50% retracement zone and should provide some support.
* Similar to the 4H stochastic reading, the Daily also shows bearish continuation momentum.




Fan Yang
Currency Analyst
Commodity Trading Advisor

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