28 Sep 2007

Yesterday news end with mix turn out. New homes sales hit low, while unemployment claims saw a drop. The Dow inch up with moderate 34 points.

Over at the Euopean side, the market also end fairly yesterday.

I will expect the movement on the GBP as moderate, with no major news. However the UK consumer confidence may tell some sign of the UK economy.

Technically, using the daily chart, the GBP moved up. A resistance to watch is 2.0300, the next at 2.0458. CCI indicate a continue up trend, pushing for another overbought situation. If the last 2 days saw the formation of the B-wave, yesterday will mark the begining of the C-Wave up towards the resistance line.

The support line is at 2.0200 and 2.0180 if the WMA5 reverse and cross the EMA100 and EMA200 using the 1 hour chart

27 Sep 2007

3 major US news tonight:

GDP
Unemplyment claims
New House Sale

Is the US economy doing well as expected. Probably not. There is a strong chance that the news will bring the GBP up.

Technically, a flag was formed. The price can breakout in any direction. The price is at 2.0220 and 2.0050.

26 Sep 2007

Two news was announced yesterday: Actual Forecast Previous
10:00pm USD Existing Home Sales 5.50M 5.50M 5.75M

10:00pm USD Consumer Confidence 99.8 104.5 105.6

Both showed figures that is worst off than previous, confidence is worst than forecast. This shows a contrast to the economy spelling a recssionally pressure, as property is one of the main indicator for the economy. The Fed did what was right in lowering rates, but will that help the people to pay up their loans? As such, this thursday unemployment claims may tell another side of the story - are the poeple earning and have the capacity to pay.

Technically, if the UK economy remain status quo, WMA5 in the 1 hour chart has rebounded from EMA200. It went below my predicted line at 2.0124 and rebounded. The WMA5 should contiune to moved northward, ending the B-wave, before the next C-wave.

25 Sep 2007

The US economy is still enjoying the short term effect from the Fed cut. With housing sales this evening, it will add to another dimension to indicate how well the economy is going.

EUR and Swiss has been making high against the dollar, but somewhat the momentum is still strong.

Technically, GBP seem to be making a short retracement. Support is at 2.0124, before another northward climb.

24 Sep 2007

The upward momentum should continue, as there will not be any major news this week that will stop that north bound direction. On Tuesday - there will be a Home sales (but I don't think it will make big impact, even if the figure release is worse off, as this is more or less expected and interest rate has been reduced to solve this problem). On Thursday, there is a GDP , Unemployment claims.

Technically, 2.0115 gives a very good support line. WMA5 has sailed passed EMA55 and EMA21 is also showing momnetum to push through. There may be a dip on the CCI(34) indicator, but will not be below the median of the BB.

20 Sep 2007

Final the wait is over. Fed announced a half a percent cut in intrest rate. I will expect the northward climb of the GBPUSD until a major announcement of either UK/US economic news that will reverse the trend.

Take note of the news tonight at 2030 - US Unemployment claims. If the news show more claims than expected, the price may go southward.

Technically, looking at the daily chart. I will clamped the price between EMA100 and EMA200, that is 2.0130 and 1.9950. That is expect a breakout at 2.0180 or 1.9880, the two Fib retracement line calculated from 12 to 17 Sep 2007.

18 Sep 2007

Fundamentally, the US market data showed a pending recession, but according to Greenspan, the inflationary presseure is still there - by looking at the oil and gold prices. Would Fed raise or lower?

Personally, I believed Fed will lower it by a quarter point and that will not move the GBP/USD pair in any big movement.

Looking at the technical from the hourly chart, GBP has punch through the EMA200. It may go on further south to settle at the next support line at around 1.9835. From the daily chart, that's hitting the EMA55 line.

After which, I will expect a reversal.

13 Sep 2007

GBP seemed to be strongly resisted at around 2.0350.

Fundamentally, everyone is waiting, waiting for 18 Sep announcement.

I am expecting a continuation to whip saw between 2.0350 and EMA200.

Technically, I favour a short, I am now waiting for CCI(34) to go into overbrought and rebound into the very first BB(14,0.9). It may take these few days.

10 Sep 07

Should and will Fed reduce interest rate and by how much?

Last Friday, we saw another great fall in the stocks market and this time it was triggered by a mere loss of 4000 jobs instead of the expected 110000.

My personal feeling was that the last market woes on the sub-prime was due not to poor lending, but more fundamental - employment. Unemployment leads to loss of jobs and income and therefore a failure to repay loan or even take any re-financing scheme. The results will be more re-procession of housing and that will trigger a cycle of cuts and spending.

The Fed should reduce interest rate to save the high housing loans, but a reduction also signal the coming of a recession - how? Check mate?

Fundamentally, it now a wait and see game.

Short term, with the GBP go north last week, I will forsee a southward direction. It not my favour in any direction, but I believe the market will move cautiously and any movement in any direction will be offset very fast.

A good resistance line is at 2.0330 and a a good support at 1.9957.

7 Sep 2007

Frankly, I do not know how the market will go and it seem that all is waiting for Sep 18th for the Fed decision. Through I have been away for holiday this week, the market has not move significantly in any direction.

I still favour a long, knowing that long and believe the pound will hover between 2.0000 and 2.0300 for the next week.