8 Oct 2009

GBP/USD Analysis:
Movement was slow, and the pound still managed to maintain and keep within the range of 1.58 and 1.60.

Today, UK CB Leading Index report at 1700hrs SGT. This compound index of 7 economic indicators is based on past data. Despite this fact, the timing, just two hours before the rate decision, can fuel nervousness. The leading index rose in the past four months, with a 0.7% rise last time.

MPC will most likely to maintain interest rates constant. The tentative time for this report is at 1900hrs SGT.

On the technical side, pound has been squeezing since the last week of September. Resistance is at 1.62 and support is at 1.577. The pound continues to form a triangle, meaning trading range became smaller. Yesterday was only within 200 pips.

The news will have impact on the new direction of the pound, that is above 1.60 towards 1.62, then 1.64. Or it may swing down towards 1.57 and head lower towards 1.50.

Trading Suggestion: Do a wait and see before the news decide the direction. The best way to trade is to trade breakout, above 1.62 and below 1.57.