12 Oct 2007

1. US Jobless claim fell and is better than expected. Trade Balance is better than expected too. As such, it justified the economy sentiments that the credit woes did not and was not due to the fundamental. This would give an indication that the economy is not hitting a recession.

With no major UK news today and with Fed speaking today (ST) at 2110, after US PPI announcement, the trend of a stronger dollars will continue. Fed is expected to cut rate, but who knows what will Ben say tonight, given indication of a "still" robust economy.

2. Europe market did a "mini" rally yesterday, with FTSE gaining almost a 100 points. US market on the contrary did some profit taking.

Note: Accordingly, a bullish rally in the market has a reverse effect on the country currency. Though not always true, people will sell away the currency to borrow cheaper currency and buy stocks.

3. Major currency ended mix. With Euro up, GBP down, CHF Up and JPY down against the US dollars.

4. Using the daily chart, no rebound and that signifies that GBP will contiune to move south. EMA21 will be the first hurdle WMA5 will cross and if it does so, a good support line will be at EMA55 or 2.0250. Of course, the resistance line is still strongly entrench at 2.0450./2.0500

Using the 1 hour chart, EMA21 has managed to cross EMA200. A good indication of a further movement south is when EMA100 cross EMA200.Should this not occur, EMA200 or 2.0380 make a immediate resistance line and 2.0400 will indicate a breakout towards 2.0450/2.0500.