5 June 2009

GU Analysis:
The Pound bounced off the resistance line at 1.6670 down to 1.6115.

GBP/USD raised its head when Halifax HPI in Britain showed an unexpected big gain. The BoE decided to leave interest rates unchanged, and to to keep the Quantitative program unchanged. Traders were expecting more, and the Pound fell back. Today, we’ll see if Britain also suffers from deflation. PPI input will draw attention at 1630hrs SGT.

Yesterday, Ben Bernenke's announcement about the gradual recovery have encouraged the traders to take profit and reevaluate the current situation. Dow came down to close at 8666 and the dollar could get off its year low versus the British pound but yesterday the risk appetite has been brought back to the market pushing DOW above 8700 again putting the greenback under pressure.

Looking technically first at the CCI, it showed a down and no clear indication whether it will reverse up or continue down. The 1=hour chart provide clues to where the support which is at current 1.609, then 1.595, then 1.588.

Resistance is at 1.630, then 1.642.

Overall bearish, but expect a rebound off the support at around 1.59 region.