3 Jul 2009

GU Analysis:
Clear indications from this morning’s US non-farm payrolls (NFP) report that the pace of job losses had accelerated, rather than slowed, was the driver of price action for the markets. Dollar rallied against a basket of currencies except Japanese yen after the key monthly U.S. employment report showed employers shed 467,000 jobs in June, more than consensus forecast of 363,000 cut, while the unemployment rate rose to 9.5%, the highest since 1983, renewing widespread concerns over the pace of the economic recovery’s pace.DOW tumbled more than 200 points and that may triggered a round of flight to safety on the dollars and the yen.

Today will be a rest day in US (Independence Day). So the only major new will be in the UK at 1630 SGT on service PMI. Here, the purchasing managers show a more positive attitude in the survey. Services PMI surprised last month by jumping above the 50 line, hitting 51.7. Should this happen, the pound may rallied to curd yesterday weakness.

GU is now supported by EMA21 on the daily chart, bring the next support to 1.62. It is still hanging there with no clear direction of going down. But breaking the support at 1.60 will be a good indicator of a down trend. CCI is down but has no clear indication.

Resistance is at 1.65 and 1.662

Trend: Down, but may rebound at support at 1.62, keeping the pound in the trading range of 1.62 and 1.67