27 July 2009

GU Analysis (1600 SGT)
The stock market did a rally with the Dow staying above 9000 on Friday closing. Asian market was almost blue, with the European market following likewise.

The first piece of news this week that could affect the pound will be US New Home Sales at 2200hrs SGT.

From the technical side, Pound is still supported by EMA21 on the daily chart, giving good support at 1.6395.

It did a morning rally towards 1.652 and now currently doing a retracement. From the 1 hour chart it did a 50% Fib retracement to 1.6453. The next level is at 1.6437. Support at EMA200 on the 1 hour chart is at 1.6428.

Looking at the trend, as long as the EMA21 support is not breech, pound has the potential to go higher. Its sister pair EUR/USD is also hitting 1.4250.

Resistance at 1.652, then 1.659

Trend: Up, provide, EMA21 at 1.64 is not broken.