GBP/USD Analysis:
The dollar continued to show its weakness. Traders are starting to look at the fundamentals which drive currency markets, namely the interest rate differential. If the ECB is getting ready to exit its stimulus programs then this is a sign that interest rates will remain at 1% and possibly move higher by early next year. This would make the Euro a more attractive investment than the Dollar because the Fed is not set to raise interest rates until at least mid-2010.
U.S. existing home sales report came out better than expected. This stopped the decline in the Dollar as it indicated the economy may be stronger than previously thought. Dow also climbed 1% adding more than 133 points.
The pound as a result halt its climb yesterday at around 1.665 and retrace back below 1.60. Naturally, it create again a resistance at 1.666/68 region.
This afternoon we have 3 news from the UK. BBA Mortgage Approvals, Prelim Business Investment and Inflation Report Hearings all reported at 1730hrs SGT. The former 2 is expected to be better than expected or at least better than the previous report. Mervyn King and his associates go to parliament and talk about the inflation situation, and about the economy in general. In his last appearance in parliament, King sent the Pound way down.
Counter acting at the US news, which are at 2300hrs SGT on Consumer Confidence and HPI.
As such, tecnically the pound is expected to be range bound. Technically within 1.648and 1.662.
Trade Plan Suggestion: Trade bounds between 1.648 region for long and short at 1.662 region.
Tuesday, November 24, 2009
Wednesday, November 18, 2009
18 Nov 2009
GBPUSD Analysis:
The dollar gained on yesterday as investors trimmed short positions after euro zone economic policymakers followed U.S. Federal Reserve Ben Bernanke in commenting about the merits of a strong dollar.
But dealers said the greenback's rebound will likely limited and that the trend of a long-term dollar decline has not changed.
The GBP USD closed lower after making a valid attempt to turn higher for the day. The uptrend has been strong in this currency lately as the bulls seem to have control over the market despite attempts by Bank of England Governor King recently to talk this currency lower. It looks as if traders are beginning to believe that the economy has bottomed and that the BoE is getting ready to reduce quantitative easing.
Watch out for MPC annoucement at 1630hrs SGT.
Right now the pound look to trade within 1.683 and 1.676, giving raise to a potential breakout. Shoudl it break 1.683, the next resistance is at 1.698/1.704 region. If it break 1.676, support is at 1.668, then 1.664.
Trade Plan suggestion: A long is still favoured. But where will be the entry point? There are 3 points, one at breakout at 1.684, second is at support at 1.676 and the third is at support at 1.668. Play according to your level of comfort, and take profit at the next resistance/ support level.
The dollar gained on yesterday as investors trimmed short positions after euro zone economic policymakers followed U.S. Federal Reserve Ben Bernanke in commenting about the merits of a strong dollar.
But dealers said the greenback's rebound will likely limited and that the trend of a long-term dollar decline has not changed.
The GBP USD closed lower after making a valid attempt to turn higher for the day. The uptrend has been strong in this currency lately as the bulls seem to have control over the market despite attempts by Bank of England Governor King recently to talk this currency lower. It looks as if traders are beginning to believe that the economy has bottomed and that the BoE is getting ready to reduce quantitative easing.
Watch out for MPC annoucement at 1630hrs SGT.
Right now the pound look to trade within 1.683 and 1.676, giving raise to a potential breakout. Shoudl it break 1.683, the next resistance is at 1.698/1.704 region. If it break 1.676, support is at 1.668, then 1.664.
Trade Plan suggestion: A long is still favoured. But where will be the entry point? There are 3 points, one at breakout at 1.684, second is at support at 1.676 and the third is at support at 1.668. Play according to your level of comfort, and take profit at the next resistance/ support level.
Tuesday, November 17, 2009
17 Nov 2009
GBP/USD Analysis:
After it refuse to head below 1.668, the pound managed to gain new highs at 1.688. With Fed not willing to raise rates and MPC man Andrew said that UK recession is over, there are more reasons for the pound to head stronger.
In fact, while waiting for the CCI to hit below 0, it did a reversal and now it is heading in the up direction.
Support lies at 1.668 region, which used to be a strong resistance.
Resistance has shifted to 1.698 and 1.704 region.
There is UK Inflation letter at around 1800hrs SGT. This event will complete the inflation releases. It will only be published if the inflation target is missed – CPI falls below 1% in this case. If this happens, Mervyn King will publish a public letter to explain the reasons for this, and especially the things he’ll do to tackle it. This could mean more Pound printing.
Also look out during US trading time on core PPI to be released at 2130hrs SGT.
Trading plan suggestion: Place long trade at around support level and take profit around resistance level.
After it refuse to head below 1.668, the pound managed to gain new highs at 1.688. With Fed not willing to raise rates and MPC man Andrew said that UK recession is over, there are more reasons for the pound to head stronger.
In fact, while waiting for the CCI to hit below 0, it did a reversal and now it is heading in the up direction.
Support lies at 1.668 region, which used to be a strong resistance.
Resistance has shifted to 1.698 and 1.704 region.
There is UK Inflation letter at around 1800hrs SGT. This event will complete the inflation releases. It will only be published if the inflation target is missed – CPI falls below 1% in this case. If this happens, Mervyn King will publish a public letter to explain the reasons for this, and especially the things he’ll do to tackle it. This could mean more Pound printing.
Also look out during US trading time on core PPI to be released at 2130hrs SGT.
Trading plan suggestion: Place long trade at around support level and take profit around resistance level.
Friday, November 13, 2009
13 Nov 2009
GBP/USD Analysis:
The U.S. market was dragged lower by the sell-off seen in the commodity market on Thursday, continuing the theme started in the European session, which saw strong declines posted by crude oil and metals.
The likelihood of a short covering rally increased today from a technical perspective with the beaten down Greenback jumping 50 pips, after again finding support at the approx 75.00 level.
Euro has also lost ground, after failing 3 times to clear 1.505/06 region.
It is probably time for the dollars to regain some lost ground. Traders which has been gaining through the equlity market, the commodity market and even the currency market because of a weak dollars, will now take advantage to push the dollars strength and gain from it.
A number of news for the Euro this afternoon, followed by US Trade Balance at 2130hrs SGT. Global trade has staged a remarkable recovery from the depths of last year's panic, and that may push a demand for the dollars which is still the main trading currency.
The first line of support for the pound is at 1.6504, then 1.6396, then 1.6262.
CCI is on the down and it is expected to continue the downside movement to at least reach a near 0 or -ve CCI.
Resistance is at 1.6705, then 1.684.
Trading Plan suggestion: It is a time to do short trades and take profits at the support line. Watch how the Euro goes, which is supprted at 1.4718. Take loss if Euro rebound, because the pound will follow. Take loss at around 1.670.
The U.S. market was dragged lower by the sell-off seen in the commodity market on Thursday, continuing the theme started in the European session, which saw strong declines posted by crude oil and metals.
The likelihood of a short covering rally increased today from a technical perspective with the beaten down Greenback jumping 50 pips, after again finding support at the approx 75.00 level.
Euro has also lost ground, after failing 3 times to clear 1.505/06 region.
It is probably time for the dollars to regain some lost ground. Traders which has been gaining through the equlity market, the commodity market and even the currency market because of a weak dollars, will now take advantage to push the dollars strength and gain from it.
A number of news for the Euro this afternoon, followed by US Trade Balance at 2130hrs SGT. Global trade has staged a remarkable recovery from the depths of last year's panic, and that may push a demand for the dollars which is still the main trading currency.
The first line of support for the pound is at 1.6504, then 1.6396, then 1.6262.
CCI is on the down and it is expected to continue the downside movement to at least reach a near 0 or -ve CCI.
Resistance is at 1.6705, then 1.684.
Trading Plan suggestion: It is a time to do short trades and take profits at the support line. Watch how the Euro goes, which is supprted at 1.4718. Take loss if Euro rebound, because the pound will follow. Take loss at around 1.670.
Wednesday, November 11, 2009
11 Nov 2009
GBP/USD Analysis:
At 1300hrs SGT yesterday, a report from bloomberg by Fitch ratings which downgrade the pound, brought the upward movement to a halt. The pound came down from 1.68 to 1.66. It is now at 1.67.
But following the Fitch ratings, a series of comments on the pound about the economy "L" shape recovery, about the Inflation Report that showed inflation picking up sharply in the near term but returning to target in 2 years if rates follow market expectations.
Today we have more news on UK Claimant Count Change and Unemployment Rate at 1730hrs SGT. Claimant Count Change is expected to stay stable, and move to 20.2K. The Pound will shake in any case. In the past two months, the unemployment rate “refused” to rise to 8%, beating economists’ expectations and standing on 7.9%. Predictions are for a rise to 8%.
Technically, the pound has not break out of the 1.68/ 1.69 region. But support is at 1.666, suggesting that a strong one will sustain and move the pound within the trade range of 1.66 and 1.68.
Trade Plan suggestion: As CCI is out of the BB and hitting near 150 and now has reversed, to be conservative for long position is best taken at support line. If after the news a breakout does occur at 1.68, take long and take small profits in the 1.69 and 1.70 region.
At 1300hrs SGT yesterday, a report from bloomberg by Fitch ratings which downgrade the pound, brought the upward movement to a halt. The pound came down from 1.68 to 1.66. It is now at 1.67.
But following the Fitch ratings, a series of comments on the pound about the economy "L" shape recovery, about the Inflation Report that showed inflation picking up sharply in the near term but returning to target in 2 years if rates follow market expectations.
Today we have more news on UK Claimant Count Change and Unemployment Rate at 1730hrs SGT. Claimant Count Change is expected to stay stable, and move to 20.2K. The Pound will shake in any case. In the past two months, the unemployment rate “refused” to rise to 8%, beating economists’ expectations and standing on 7.9%. Predictions are for a rise to 8%.
Technically, the pound has not break out of the 1.68/ 1.69 region. But support is at 1.666, suggesting that a strong one will sustain and move the pound within the trade range of 1.66 and 1.68.
Trade Plan suggestion: As CCI is out of the BB and hitting near 150 and now has reversed, to be conservative for long position is best taken at support line. If after the news a breakout does occur at 1.68, take long and take small profits in the 1.69 and 1.70 region.
Tuesday, November 10, 2009
10 Nov 2009
GBP/USD Analysis:
A very nice combination in development. First the equity market, with the Dow breaking and staying above 10200 points gaining more than 2% last night. Second the Euro hit 1.5 again. Third, crude near $80 a barrel and gold hit new high of above $1100.
Is the dollar a gonna? The global economy has definately recover, but the demand for dollars is not there. Is there an unstated underlying that people are replacing the dollars with other currencies? It look like investors are gorging on anything other than the U.S. dollar as a new feast of fourth quarter risk appetite gets underway.
U.K. retailers posted their strongest October sales growth since 2002, House prices in England and Wales rose last month at their strongest rate in almost three years, buoyed by tight supply and record low interest rates. Good news to strengthen the pound.
A lot more Euro news this afternoon. This will see the Euro break and rebound off 1.500 for this week. Also British trade balance is traditionally negative – meaning there’s a deficit. This deficit has slightly squeezed in recent months, edging down to 6.2 billion pounds. It’s predicted to edge down some more, to 6.1 billion. A smaller deficit will help the Pound. Published at 1730 SGT.
On technical analysis, the pound found new support at 1.668. It did its first retracement to this support and tested it last night coming down from yesterday high of 1.684. It may test this support again and with the CCI edging and nearing +150, the pound may be trading within 1.69 and 1.668 today.
Breaking 1.69, together with the Euro clearing 1.500, will give the pound a boost towards 1.7, confirming the contiuation in U.S dollars selling.
Trade plan suggestion: As the CCI has punch out of the BB, its not quite safe to jump into the long. Of course the sentiments look right for a long position. Wait for retracement to EMA55 or EMA100 and take small profit.
A very nice combination in development. First the equity market, with the Dow breaking and staying above 10200 points gaining more than 2% last night. Second the Euro hit 1.5 again. Third, crude near $80 a barrel and gold hit new high of above $1100.
Is the dollar a gonna? The global economy has definately recover, but the demand for dollars is not there. Is there an unstated underlying that people are replacing the dollars with other currencies? It look like investors are gorging on anything other than the U.S. dollar as a new feast of fourth quarter risk appetite gets underway.
U.K. retailers posted their strongest October sales growth since 2002, House prices in England and Wales rose last month at their strongest rate in almost three years, buoyed by tight supply and record low interest rates. Good news to strengthen the pound.
A lot more Euro news this afternoon. This will see the Euro break and rebound off 1.500 for this week. Also British trade balance is traditionally negative – meaning there’s a deficit. This deficit has slightly squeezed in recent months, edging down to 6.2 billion pounds. It’s predicted to edge down some more, to 6.1 billion. A smaller deficit will help the Pound. Published at 1730 SGT.
On technical analysis, the pound found new support at 1.668. It did its first retracement to this support and tested it last night coming down from yesterday high of 1.684. It may test this support again and with the CCI edging and nearing +150, the pound may be trading within 1.69 and 1.668 today.
Breaking 1.69, together with the Euro clearing 1.500, will give the pound a boost towards 1.7, confirming the contiuation in U.S dollars selling.
Trade plan suggestion: As the CCI has punch out of the BB, its not quite safe to jump into the long. Of course the sentiments look right for a long position. Wait for retracement to EMA55 or EMA100 and take small profit.
Friday, November 06, 2009
6 Nov 2009
GBP/USD Analysis:
There was alot of expectation coming from FOMC and MPC. In summary, FOMC said that intesrest rated will remain and that the economy is picking up. MPC reduced the expected quality easing program by 25billion pound and that sent the pound high hitting as much as 1.663.
US employment has reported a lower claim, indicating that indeed the economy is on its feet.
It will be a watch now for the pound in its abilities to clear 1.666 resistance. Today we have UK at 1730hrs SGT PPI Input. Evening we have major reports from the US on Non-Farm Employment Change at 2130hrs SGT.
The technicals does not appear to convice any direction. Despite CCI pointing up, but BB showed a squeeze. Moreover, the last round of down did not enter into negative CCI, showing a weak up.
Resistance is at 1.666, and then it may show some blue sky towards 1.698. Support is at 1.640 then 1.628
Trade Plan for the day: CCI is up, but wait for breakout at 1.666 then long andtake profit at 1.67/ 75 region if you are playing intra day. If price retrace, pick up and long around 1.64 to 1.645 region
There was alot of expectation coming from FOMC and MPC. In summary, FOMC said that intesrest rated will remain and that the economy is picking up. MPC reduced the expected quality easing program by 25billion pound and that sent the pound high hitting as much as 1.663.
US employment has reported a lower claim, indicating that indeed the economy is on its feet.
It will be a watch now for the pound in its abilities to clear 1.666 resistance. Today we have UK at 1730hrs SGT PPI Input. Evening we have major reports from the US on Non-Farm Employment Change at 2130hrs SGT.
The technicals does not appear to convice any direction. Despite CCI pointing up, but BB showed a squeeze. Moreover, the last round of down did not enter into negative CCI, showing a weak up.
Resistance is at 1.666, and then it may show some blue sky towards 1.698. Support is at 1.640 then 1.628
Trade Plan for the day: CCI is up, but wait for breakout at 1.666 then long andtake profit at 1.67/ 75 region if you are playing intra day. If price retrace, pick up and long around 1.64 to 1.645 region
Wednesday, November 04, 2009
4 Nov 2009
GBP/USD Analysis:
The pound hit its 1.6275 support line and rebound back to 1.646, 20 pips below 1.648 which is yesterday high. This form a hammer.
As expected UK Construction PMI posted at 46.2 was worse than expected. The rebound was caused by a 2100hrs SGT news on UK Halifax HPI (which was not schedule during yesterday morning annlysis).
Today at 0800hrs SGT UK will have its confidence report, which will set the direction for the pound till 1730hrs SGT before the UK Services PMI.
The pound is generally weak because of the amount of debt over GDP, which is more than 10%, more than the US. Therefore as part of analysis, all eye FOMC this Thursday at 0315hrs SGT and MPC meeting this Thursday. Its about monetary policy.
Now that the US has its feet out of the recession, will Fed unplug the trillion of dollars plan and raise interest rates? If that is so, the dollars will strengthen and then what will the UK government do to the pound?
Today I am expecting a trading range of between 1.65 and 1.6220. Resistance at 1.660 and support at 1.6220.
Trading plan suggestion: To be conservative because of any major breakout that could happen on Thursday, trade at resistance and support line. Remember to little gains and let go when it break out of resistance and support lines.
The pound hit its 1.6275 support line and rebound back to 1.646, 20 pips below 1.648 which is yesterday high. This form a hammer.
As expected UK Construction PMI posted at 46.2 was worse than expected. The rebound was caused by a 2100hrs SGT news on UK Halifax HPI (which was not schedule during yesterday morning annlysis).
Today at 0800hrs SGT UK will have its confidence report, which will set the direction for the pound till 1730hrs SGT before the UK Services PMI.
The pound is generally weak because of the amount of debt over GDP, which is more than 10%, more than the US. Therefore as part of analysis, all eye FOMC this Thursday at 0315hrs SGT and MPC meeting this Thursday. Its about monetary policy.
Now that the US has its feet out of the recession, will Fed unplug the trillion of dollars plan and raise interest rates? If that is so, the dollars will strengthen and then what will the UK government do to the pound?
Today I am expecting a trading range of between 1.65 and 1.6220. Resistance at 1.660 and support at 1.6220.
Trading plan suggestion: To be conservative because of any major breakout that could happen on Thursday, trade at resistance and support line. Remember to little gains and let go when it break out of resistance and support lines.
Tuesday, November 03, 2009
3 Nov 2009
GBP/USD Analysis:
The pound hit hihg last Friday again at 1.6604, which I see it as a failed attempt to clear resistance at 1.666. This form a double top on the daily chart, bring a full potential for the pound to fall back to 1.6275 region.
Added bads news about the UK banks and BoE needs to approve emergency loans to financial institutions. To some extent, it seems that the U.K. financial system may have been hit by the credit crisis in a far harder and deeper fashion than other regions.
Today at 1730hrs SGT, UK will be reporting on Construction PMI. There should report better than expected and may keep the pound above 1.6275. Contrary to house prices, this housing sector indicator is still negative. This time, it’s expected to go back up to 47.2, but still in the negative zone.
Looking at the CCI, the pound is moving down. CCI is still positive, menaing that the downside potential is there. Support is at 1.6275 then 1.6220, then 1.6132 for today.
On the top we have 1.660, then 1.666.
Trade Plan suggestion: If you need to short do take profit around 1.6275 or 1.622 region. If market rebound just before or after the news and bring the pound back to 1.6488 region, it is an indication for you to take loss.
The pound hit hihg last Friday again at 1.6604, which I see it as a failed attempt to clear resistance at 1.666. This form a double top on the daily chart, bring a full potential for the pound to fall back to 1.6275 region.
Added bads news about the UK banks and BoE needs to approve emergency loans to financial institutions. To some extent, it seems that the U.K. financial system may have been hit by the credit crisis in a far harder and deeper fashion than other regions.
Today at 1730hrs SGT, UK will be reporting on Construction PMI. There should report better than expected and may keep the pound above 1.6275. Contrary to house prices, this housing sector indicator is still negative. This time, it’s expected to go back up to 47.2, but still in the negative zone.
Looking at the CCI, the pound is moving down. CCI is still positive, menaing that the downside potential is there. Support is at 1.6275 then 1.6220, then 1.6132 for today.
On the top we have 1.660, then 1.666.
Trade Plan suggestion: If you need to short do take profit around 1.6275 or 1.622 region. If market rebound just before or after the news and bring the pound back to 1.6488 region, it is an indication for you to take loss.
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