EUR/USD came a tad lower to 1.2262 yesterday then we took off for 123.90 before coming back to the 50% short term fib level of 1.2298. Now this morning if we can hold this level of 1.2297 then we should be able to travel higher with 1.2355 seen as your first target. Initially cover all longs to these higher levels. You can always re-instate further longs above 1.2355. So if 1.2355 holds expect another move 1.2297 where once more buyers are expected.

If we lose 1.2997 buyers will evaporate, joining sellers to drive this lower to 1.2240/35, possibly 1.2208 once more. Now if we break the 1.2355 resistance we should have another go at the 1.2390/97 resistance. Here again longs to be covered. Between here and 1.2425 offers good resistance and should not break easily.

GBP/USD edged back from 1.5013 to 1.4916. This move has eased overbought indicators and has left the market looking stronger for this session. You still have resistance from trendline at 1.5012/14 and this should initially cap the topside once more. If not and we break above 1.5025 we are looking at this trading higher for 1.5066/69 to 1.5088. If 1.5012/14 holds pullbacks are expected with 1.4920/16 targeted. You should find buyers coming in at these lower levels looking to hold up the market. However, the med term charts are beginning to be overbought and looking to turn so keep this in mind.

Failure to hold over 1.4890 sees us come lower with 1.4835/24 to 1.4800 then the short term objective.

Eur/Gbp After breaking lower buyers took the cross back above 8250 for 8277 before sellers came back into the market. This morning we are below 8250 and this suggests that another assault on the downside is imminent. If we can hold below 8250 then expect drop to 8202/01 region. Sellers would be advised to initially cover shorts to here. If we break 8200 sellers are expected then to come back into the market looking for further weakness leading to 8180 first then 8165.

Now if we can claw back above 8250 look for this to come back towards the 8300 resistance. Sellers once more will be waiting at these higher levels and will only reverse if 8310 is broken.