Technically, it all point to a bearish movement. GBP hit 1.52 high and reverese. It did a major reverse with strength breaking support at 1.516, 1.509, then 1.50. It finally landed low at 1.494 and now doing retracement.
Candlestick formation shows bearish engulfment and CCI 14 point to a new start of selling soon.
So, then are the fundamental supporting the bearish movement?
Yesterday, BOE steady rates as contrast to ECB reducing rates. MPC increase bond purchase, a sign which in my opinion point to an economy that still need more medicine.
In the US, the much expected news on bank stress test point to an economy that is still recovering. DOW drop by a 1%. More US news will be out tonight. The steady accumulation of job losses does not bode well for economic growth going forward and indicates that the unemployment rate will continue to climb. The 8:30 ET release of US non-farm payrolls (NFPs) is likely to show job losses for the sixteenth straight month in April, but the rate of decline is anticipated to slow.
US news are tricky - but if both economy are weak, the flock back to the greenback for safety is there and that strengthen the dollars.
Friday, May 08, 2009
Thursday, May 07, 2009
7 May 2009
Good news in the US, coupled with DOW gaining 100 points yesterday sowing the strength of the recovery. However, this only weaken the pound, but it seem contridicted as at now, the price has near the top of the resistance at 1.515.
Major news from MPC out in the afternoon. That news might bring a break out of the pound to new high towards 1.538.
Meanwhile in the morning, will the market trade the GBP down from its resistance? Wait to see. The next resistance is at 1.526. It may retrace to 1.5076, then 1.5056. Support still strong at 1.50.
From the chart GBP has been oversold by more than 150% and may start is bear run.
Overall direction is now mix with both bullish and bearish sentiments.
Major news from MPC out in the afternoon. That news might bring a break out of the pound to new high towards 1.538.
Meanwhile in the morning, will the market trade the GBP down from its resistance? Wait to see. The next resistance is at 1.526. It may retrace to 1.5076, then 1.5056. Support still strong at 1.50.
From the chart GBP has been oversold by more than 150% and may start is bear run.
Overall direction is now mix with both bullish and bearish sentiments.
Wednesday, May 06, 2009
6 May 2009
This morning 0700 SGT, UK gave some good news on Consumer confidence. The better than expected results may spur GBP to move higher. But of course, another important news that will be out is Housing Price Index (HPI) and Purchasing Manager Index (PMI) at 1630 SGT.
Japan is on holiday and thus we may not see any big movement, but my expectation is for GBP to move up before 1630hrs news before it deceide on the next direction.
Looking technically, GBP has gain new high above 1.516. It has done its retracement from 1.516 to now at 1.505, almost to 50% at 1.5. Giving at good support.
Looking technically at a macro level, GBP has reached a very much overbought position (using CCI 14) by almost more than 150%. It has not reverse, showing strength of reaching a level of 1.53 (resistance level at 100EMA)
Japan is on holiday and thus we may not see any big movement, but my expectation is for GBP to move up before 1630hrs news before it deceide on the next direction.
Looking technically, GBP has gain new high above 1.516. It has done its retracement from 1.516 to now at 1.505, almost to 50% at 1.5. Giving at good support.
Looking technically at a macro level, GBP has reached a very much overbought position (using CCI 14) by almost more than 150%. It has not reverse, showing strength of reaching a level of 1.53 (resistance level at 100EMA)
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