1 Jul 2009

GU Analysis:
The better than expected result in HPI pushed the pound to over 1.67, hitting high at 1.674 before the GDP and current supply hit back to negative ground to 1.642.

The US side provide no better stimulus for the pound to move lower, as U.S. stocks fell, limiting the biggest quarterly advance for the Standard & Poor’s 500 Index since 1998, after consumer confidence unexpectedly slid and delinquencies on the least-risky mortgages more than doubled.

Today at 1630 SGT, Manufacturing PMI: Purchasing Manager’s Index shows future expectations for the manufacturing sector. A figure below 50 means contraction. The figure has been below 50 for over a year, but has advanced in the last three months. Also now, it’s predicted to rise from 45.4 to 46.3. This will surely shake the Pound.

In the US, Unemployment in the U.S. probably rose at a slower pace and the manufacturing slump eased this month as evidence mounted that the end of recession is in view, economists said before reports this week. The jobless rate rose 0.2 percentage point to 9.6 percent, the highest level in 26 years, according to the median of 58 estimates in a Bloomberg News survey. The gain would be the smallest since November 2008. A survey of purchasing managers may show manufacturing shrank at the mildest pace in 10 months.

Looking at the technicals, strong support is at 1.6405. Breaking this will bring it to 1.624.
From the 1 hour chart point, resistance is at 1.654, breaking this will bring it back to 1.67.

Trend: Up, but expect disruption at 1630hrs if the Manfacturing PMI turn sour.