Euro and pound came under pressure-jan 21.

Euro came under pressure as the key 1.3000 level gave way in Asia and the heavy stocks saw the pair dip in 1.28’s. EUR/JPY dropped hard falling to 115 as risk aversion surged higher. EUR/GBP jumped higher as the Pound continued to plummet. January German ZEW Survey showed a bounce to -31 vs. -43.5% expected as recent rate cuts improved the business outlook. Looking ahead for German PPI is expected to drop -1.2% in December. ECB President Trichet also speaks today. Sterling near capitulated coming under heavy selling pressure all day as the market continued to factor in a deteriorating UK banking sector. December CPI lost -0.4% vs. -0.8% forecast. Looking ahead for December Claimant Count with a forecast at 85k vs. 75.7k. The November ILO Unemployment rate is forecast 6.1%.·
Technical Outlook:
Euro
R1: 1.3120 S1:1.2840
R2: 1.3140 S2:1.2830
chart pattern hints a mixed note for the day wih the Trading range expected between 1.2850-1.3100 levels for the day. Momentum and stochastic are seen is seen flat but at the oversold territory giving clues for the possibility of an upward correction .
Pound
R1: 1.4180 S1: 1. 3800
R2: 1.4220 S2: 1. 3780
chart pattern hints towards a mixed trend but the possibility of slight upward correction cannot be ruled out as the chart forms a small reversal pattern .Trading range is expected between 1.3810-1.4170 levels for the day. Currency is trading below the moving average and stochastic is also seen trending up after forming a head and shoulder pattern showing slight upward correction.