14 Jul 2009

GU Analysis:
For most of the day, the cable was hitting the down hill. The reversal took place just before the US opening with no news in the forecast..

This scenario changed when analyst Meredith Whitney upgraded her recommendation in the Goldman Sachs Group from neutral to buy and made other bullish comments regarding the banking sector. Her comments were the surprise event that equity and commodity markets were looking for given the recent downtrend and oversold status. This subsequent lead to a spike in the DOW and followed through the stocks and equity market. The shift in sentiment changed from bullish Dollar to bearish Dollar.

This morning, the UK market housing survey added another fuel for the cable to climb higher.

Today, the UK will be reporting CPI at 1630 SGT. Inflation looks set to fall below the Bank of England's target for the first time in almost two years in June. If so, it may bring the cable higher.

At the US opening, retail news at 2030hrs may report numbers that the economy is still hurting. If so, this may put a stop for the upward momentum.

Technically, the pound is still constraints within 1.632, then 1.641. CCI look good for a upward trend, but unless the pound strong break through 1.641, then resistance will become support.

In the meanwhile, support is at 1.612, then 1.605.

Trend: Up, but limited by 1.641.