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.