8 Oct 2007

1. The Labor Department's report that employers added 110,000 jobs in September -- essentially what analysts had expected -- reassured Wall Street that the job market wasn't pulling back sharply as was feared a month ago (from yahoo). But on the contrary, GBP pull higher amidst the stock market rebound.

To me, this raise give false sense of the actual US economy. If the economy is truely performing, dollars will strengthen against the GBP. But not so. Therefore either GBP will fall or if really true, the US economy will show sign of weakening.

US holiday today and all news is from Europe.

Today, News of UK PPI at 1630hrs. The Producer Price Index (PPI) Input measures the rate of inflation (i.e., the rate of price changes) experienced by manufacturers when purchasing goods and services. A rising trend has a positive effect on the nation's currency. When manufactures pay more for goods and services, they are likely to pass the higher costs to the consumer, so PPI is thought to be a leading indicator of consumer inflation. PPI is highly regarded, and at extremes will have a market impact equal to that of its CPI counterpart.

2. US marker rallied on Friday. It will be a questioned for the Eupore market to have a rally.

3. Against the major currencies, the dollars show signs of weakening.

4. Using the 1 hour chart, support is at EMA200 or 2.0390. This is a good support and rebound for GBP. Aleternatively, a breakout north for GBP is at 2.0450. A breakout south is at 2.0340.