9 Oct 2007

1. Last night at 2230hrs, Euro govt gathered to discuss about the strength of the Euro against the dollar.

LONDON (Thomson Financial) - The euro softened, particularly against the dollar, as euro area finance ministers meet to discuss, among other topics, how to contain the strength of their common currency.In the run-up to the Ecofin meeting, held today and tomorrow, politicians have been vocal about the need to do something about the strength of the euro. Together, they will be drafting a policy stance to bring to the G7 meeting later this month, in an effort to make other currencies -- the US dollar, most notably -- to appreciate.

Also, GBP PPI continue to weaken.

As a result, yesterday the GBP came down from above 2.0420 to 2.0350.

Today at 1630hrs, theres is a news on GBP trade balance and Euro Central Bank chief Trichet will be speaking. At 2230, The Chancellor of the Exchequer will present the annual Pre-Budget Report and the outcome of the Comprehensive Spending Review to the House of Commons. The report contains important insights such as spending levels, borrowing estimates, and GDP growth forecasts for the following year.

2. Overall, Europe market did a dip. US market close with little movement from Friday rally.

3. Against the dollars, EUR and CHF has reverse and weaken against the dollar. The Yen continue its weakening process but seem to slow down.

4. On the technical, from the daily chart, the GBP has reverse. The momentum should contiune and a good support line is at 2.0240, the EMA55 line. Upward movement is possible, but a strong resistance is felt at 2.0450, considering the GBP trying but fail to breakout of this line for the last 5 days.
On the 1 hour chat, clearly the EMA21 has cross the EMA200 and should move south. A good gauge will be at 2.0330 to observe whether a U-turn will occur, else it will be making today low.