21 July 2009

GU Analysis:
GBPUSD did a breakout of 1.64 yesterday, staying off and rebound off the daily EMA21. It hit high of 1.6557.

The Dow rally again for the 6th week based on good news from CIT, plus better than expected earnings report. Also, the Conference Board's index of leading economic indicators rose 0.7 percent in June, more than the 0.4 percent forecast. It was the third straight month of gains, showing sign of bottoming out.

Today and this week there will be more earnings report from Apple, AMD, Texas Instrument, Mircosoft, Toyota etc. These better than expected result will give Dow a further boost and subsequently the abandament of USD.

Looking at the technical chart in 1 hour, there will be some retracement from 1.6557. The support is at 1.6467/1.6446 region. The next level is 1.632.

Resistance is at 1.6633, then 1.675.

Trend: Up, but expect retracement and beware of EMA21 daily support.