28 Oct 2009

GBP/USD Analysis:

The pound hit the resistance of 1.666 last week, hitting 1.69, before the UK announcement of GDP sent the pound back to 1.63 region.

Over the last 2 days the pound retrace and now is back in the 1.635/1.640 region partly due to Tuesday CBI Realized Sales which saw the fastest growth since lst year, beating expectation.

Yesterday, Adam Posen is a member of the MPC, responsible for rate decisions. He’s rather dovish, urging the expansion of the QE program, if thus doing so will weaken the pound.

Today at the US, we have news from Core Durable Goods Orders at 2030hrs and New Home Sales at 2200hrs. The general expectaion is good, expecting a better report for a growing economy.

Looking at the technical, showed the EMAs at the 1 hour chart sitting on the hinge. A big squeeze was created at the EMA200 at 1.634 and 1.636 region, indicating a major break up or down.

The daily chart show the pound supported at 1.6277 and resisted at 1.644. The next suport is at 1.613/12 region then 1.6024. Of course, breaking 1.666 will bring the pound higher, which may not likely be seen this week.

Trade Plan suggestion: CCI indicate short. Added to the absence of UK news today plus a better than expected US report, will suggest the pound to further retrace to support line at 1.612, then 1.6024.







































































































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nalysis:

The pound hit
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