16 June 2009

GU Analysis
The Dow Jones industrials fell 187 points Monday. The slide began in Asia and Europe and spread to the U.S. as a strong dollar pushed commodities prices sharply lower.

Overseas trading was influenced by the dollar, which rose against most other major currencies following weekend comments from Russia's finance minister, Alexei Kudrin, that the greenback likely would remain the world's reserve currency.

Today, first at 1630 SGT, the UK CPI news. Is Britain sinking into deflation? The Euro zone is already there, and Britain has avoided falling prices so far. The Consumer Price Index is expected to rise by 1.9% (annually adjusted). This is lower than last month’s 2.3%. If this happens, the Pound will suffer. This is the fisr indicator for the week, and quite a strong one.

Tonight UK production and housing at 2030hrs SGT. Reports on manufacturing and housing this week will probably offer evidence that the recession- stricken U.S. economy is within months of hitting bottom

Looking technically, pound will first target support at daily EMA21 at 1.6125, then 1.594. Resistance is at 1.644 then 1.658.

Trend: Bearish.