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.