22 July 2009

GU Analysis:
It seems that the flight to safety is back. Both the dollar and the yen strengthen against the majors.

Last night Federal Reserve chairman speech that the danger of a weak economy is still lurking around. Employment will be going to be weak through 2011 and that will minus off consumer confidence. Stocks raises though the better than expected news from Apple, but not AMD and Caterpillar. The better forecast by Caterpillar boost the demand for crude and this will take advantage of a weaker dollar.

Today, The Confederation of British Industry publishes this monthly indicator on Wednesday at 1800SGT. This indicator has brought bad news since the beginning of the year. It has always missed the target, and also remained negative (showing contraction) for over a year. Current hopes aren’t so good for the British manufacturing sector - the index is expected to improve only slightly - from -51 to -46. Only a very good surprise will shake the Pound after the release

Sterling is down from 1.65 and back to support at EMA200 on the hour chart at 1.64. The daily support at EMA21 is at 1.634 and is not broken yet.

Resistance is at 1.65 then 1.657. Support lies at 1.637 then 1.632.

Trend: Down