GBP/USD
What happen in UK?
There were expectations for an upwards revision to 0.2%, and the outcome was better than expected – 0.3%. GBP/USD rose towards the release, but fell back after it. The move was from 1.5250 to 1.5315 and back down afterwards.
The reason is mostly technical: After breaching the important support line at 1.5350 on Thursday morning, this line turned into a strong line of resistance. As the Pound got close to it, stop orders sent it back down.
This important release wasn’t enough to send it higher. GBP/USD is now trading in a range between 1.5350 and 1.5230. It already went lower – 1.5189. This is another support line.
What happened in US?
There is little evidence that the U.S. economy has recovered from the recession or is going to recover from the recession anytime soon. The support for the recovery viewpoint comes from government statistics that have been highly manipulated. All governments, of course, want to present a rosy picture of their handling of the economy for political reasons and it is much easier to make the numbers better than it is to actually make the economy better. Eventually the public catches on to this game, however. The recent consumer confidence numbers indicate that the American public is no longer buying the public relations story, but is starting to pay more attention to the realities they have to face on a day to day basis.
Yesterday Analysis: "Watch and if possible catch the wave to its next suport or resistance line."
Pound failed to breach resistance at 1.530, so it was a wave down from 1.530 to a low of 1.515
Saturday, February 27, 2010
Friday, February 26, 2010
26 Feb 2010
GBP/USD Analysis:
News from Euro and UK are enough to see why the weakness in these currencies.
In the UK, "London Capital profit falls, not to pay final dividend", Fears mounted Thursday that Britain may not have emerged from recession at the end of 2009 after all, as statistics showed a dramatic fall in business investment in the last three months of the year.
In Euro, EUR/USD has priced in the possibility of the unthinkable: the default of a member of the euro zone.
From the daily chart pound has broken below key support in the 1.5350 price region. It went as low as 1.5200, only to recover back to 1.526 this morning, given the uneasiness about the economy.
Global markets retreated earlier this month because traders were worried about Greece's debt problems. The market's drop early in the week, a rebound and the latest slide signal that investors are waiting for clearer information on the direction of the economy.
Yesterday analysis: Indeed, "I am not expecting the pound to do well today and may test new low at 1.535/30 region.".
Today expectation: Its Friday and everyone will be waiting for some outcome in the Euro zone on Greece. Any news will sent the pound in either direction. There are UK news on Consumer Confidence at 0800 SGT and UK Nationwide HPI at 1500hrs SGT. This are signs of the UK economy.
Support now lies at 1.505 and it is only about 200 pips which is quick possible for pound to test it today.
On the up side, the pound did its first Fib retrecement to 1.526 this morning. The next is at 1.530 (EMA21) and 1.533 (EMA55).
My expectation: Watch and if possible catch the wave to its next suport or resistance line.
News from Euro and UK are enough to see why the weakness in these currencies.
In the UK, "London Capital profit falls, not to pay final dividend", Fears mounted Thursday that Britain may not have emerged from recession at the end of 2009 after all, as statistics showed a dramatic fall in business investment in the last three months of the year.
In Euro, EUR/USD has priced in the possibility of the unthinkable: the default of a member of the euro zone.
From the daily chart pound has broken below key support in the 1.5350 price region. It went as low as 1.5200, only to recover back to 1.526 this morning, given the uneasiness about the economy.
Global markets retreated earlier this month because traders were worried about Greece's debt problems. The market's drop early in the week, a rebound and the latest slide signal that investors are waiting for clearer information on the direction of the economy.
Yesterday analysis: Indeed, "I am not expecting the pound to do well today and may test new low at 1.535/30 region.".
Today expectation: Its Friday and everyone will be waiting for some outcome in the Euro zone on Greece. Any news will sent the pound in either direction. There are UK news on Consumer Confidence at 0800 SGT and UK Nationwide HPI at 1500hrs SGT. This are signs of the UK economy.
Support now lies at 1.505 and it is only about 200 pips which is quick possible for pound to test it today.
On the up side, the pound did its first Fib retrecement to 1.526 this morning. The next is at 1.530 (EMA21) and 1.533 (EMA55).
My expectation: Watch and if possible catch the wave to its next suport or resistance line.
Thursday, February 25, 2010
25 Feb 2010
GBP/USD Analysis:
With Euro and UK under strikes and walkout, recover of the economy is seriously in question. Added to the woes are reports of stagnant consumer spending and confidence.
Before Fed chairman spoke, pound was hovering between 1.548 and 1.540. The U.S. Dollar regained most of its mid-session loss to finish only slightly worse than Tuesday. Comments from Fed Chairman Bernanke triggered an early session break after he reiterated the Fed’s stance that interest rates would remain low for an “extended period”.
Yesterday Analysis: Indeed, the pound range within 1.540 and 1.548 before US trading. It attempted EMA100 and EMA200 but failed. During US trading, it finally break support at 1.540.
Today expectation: Support at critical level at 1.535 / 1.530. If broken, expect the pound to hit a new low at 1.505!
Of course the resistance is at 1.545/ 1.550 (1 hour chart EMA100 /EMA200 )
The news in the afternooon is not so pleasing to either the Euro or the pound. German Unemployment Change: Published on Thursday at 1655 SGT. After 6 straight months of drop in unemployment, a rise of 6000 people was seen last month. This negative will probably be continued with another rise – 18,000 this time. Yet another weak figure from this big country, which nicely fits into the double-digit European unemployment rate.
At 1700hrs SGT BOE Gov King Speaks. With the economy barely crawling out of recession, a rapid fiscal retrenchment would be treated to a "savage" reaction in foreign exchange markets.With confidence in British policymaking gone, the pound would risk plunging to 1.50 against the dollar.
Therfore, I am not expecting the pound to do well today and may test new low at 1.535/30 region.
With Euro and UK under strikes and walkout, recover of the economy is seriously in question. Added to the woes are reports of stagnant consumer spending and confidence.
Before Fed chairman spoke, pound was hovering between 1.548 and 1.540. The U.S. Dollar regained most of its mid-session loss to finish only slightly worse than Tuesday. Comments from Fed Chairman Bernanke triggered an early session break after he reiterated the Fed’s stance that interest rates would remain low for an “extended period”.
Yesterday Analysis: Indeed, the pound range within 1.540 and 1.548 before US trading. It attempted EMA100 and EMA200 but failed. During US trading, it finally break support at 1.540.
Today expectation: Support at critical level at 1.535 / 1.530. If broken, expect the pound to hit a new low at 1.505!
Of course the resistance is at 1.545/ 1.550 (1 hour chart EMA100 /EMA200 )
The news in the afternooon is not so pleasing to either the Euro or the pound. German Unemployment Change: Published on Thursday at 1655 SGT. After 6 straight months of drop in unemployment, a rise of 6000 people was seen last month. This negative will probably be continued with another rise – 18,000 this time. Yet another weak figure from this big country, which nicely fits into the double-digit European unemployment rate.
At 1700hrs SGT BOE Gov King Speaks. With the economy barely crawling out of recession, a rapid fiscal retrenchment would be treated to a "savage" reaction in foreign exchange markets.With confidence in British policymaking gone, the pound would risk plunging to 1.50 against the dollar.
Therfore, I am not expecting the pound to do well today and may test new low at 1.535/30 region.
Wednesday, February 24, 2010
24 Feb 2010
GBP/USD Analysis:
The GBP/USD shedded more than 160 pips as an aftermath of disappointing releases, dragged down by Euro.
The German Ifo Business Climate came in lower than expected and lower than the previous release. With strikes going on by the airlines, recovery may be bogged down.
US CB Consumer Confidence suffered a setback. Lower than expected, lower than the previous release, it caused the Dow to fell more than 100 points.
Today brings more releases to test the fragile sentiments. Featuring releases such as Industrial New Orders for the Euro and New Home Sales for the US. Fed Chairman Bernanke is due to testify too.
Yesterday Accuracy report: Indeed the pound attempt 1.555, it hit high at 1.557, but fell back to 1.54 below the 1.550 support line after setback in news releases.
Today: Support now stands at 1.540, which can easily breach and the next at 1.530, possible if the news releases are less positive.
Resistance is at 1.548, then 1.555.
In a most likely situation, pound will stay within 1.540 and 1.548 before the news releases. General sentiments are bearish.
The GBP/USD shedded more than 160 pips as an aftermath of disappointing releases, dragged down by Euro.
The German Ifo Business Climate came in lower than expected and lower than the previous release. With strikes going on by the airlines, recovery may be bogged down.
US CB Consumer Confidence suffered a setback. Lower than expected, lower than the previous release, it caused the Dow to fell more than 100 points.
Today brings more releases to test the fragile sentiments. Featuring releases such as Industrial New Orders for the Euro and New Home Sales for the US. Fed Chairman Bernanke is due to testify too.
Yesterday Accuracy report: Indeed the pound attempt 1.555, it hit high at 1.557, but fell back to 1.54 below the 1.550 support line after setback in news releases.
Today: Support now stands at 1.540, which can easily breach and the next at 1.530, possible if the news releases are less positive.
Resistance is at 1.548, then 1.555.
In a most likely situation, pound will stay within 1.540 and 1.548 before the news releases. General sentiments are bearish.
Tuesday, February 23, 2010
23 Feb 2010
GBP/USD Analysis:
Yesterday: The pound as predicted keep within trading range of 1.55 and 1.53. It did not go below 1.54 but instead attempt to break 1.552, which is EMA100 on the 1 hour chart.
Today: Both French and Germany are expected to report consumer spending and business climate respectively. Numbers are expected to fall. Greece still doesn’t have a backstop plan and there’s a lack of concrete details coming from Germany and France.
UK MPC is expected to report on inflation. Inflation is up in the UK, however the Bank of England is ignoring this fact on the basis that they believe it to only be temporary. Expect more of this talk and that they will keep rates steady for some time.
There has been no change in the fundamentals. The budget deficit, weak economy and lack of confidence in the Bank of England are still the catalysts behind the weakness in the British Pound.
In the absence of news, the pound did an attempt on EMA100 on the 1 hour chart. It hit high at 1.552 and current WMA5 hovers between EMA100 and EMA55/EMA21.
Support is therefore at 1.548/1.546, while resistance is at 1.550/1.552. If a breakout occur at 1.552, then it will attempt 1.555.
With the news coming in the afternoon, the adverse effect on any negative reports is for the pound to attemp 1.53.
Yesterday: The pound as predicted keep within trading range of 1.55 and 1.53. It did not go below 1.54 but instead attempt to break 1.552, which is EMA100 on the 1 hour chart.
Today: Both French and Germany are expected to report consumer spending and business climate respectively. Numbers are expected to fall. Greece still doesn’t have a backstop plan and there’s a lack of concrete details coming from Germany and France.
UK MPC is expected to report on inflation. Inflation is up in the UK, however the Bank of England is ignoring this fact on the basis that they believe it to only be temporary. Expect more of this talk and that they will keep rates steady for some time.
There has been no change in the fundamentals. The budget deficit, weak economy and lack of confidence in the Bank of England are still the catalysts behind the weakness in the British Pound.
In the absence of news, the pound did an attempt on EMA100 on the 1 hour chart. It hit high at 1.552 and current WMA5 hovers between EMA100 and EMA55/EMA21.
Support is therefore at 1.548/1.546, while resistance is at 1.550/1.552. If a breakout occur at 1.552, then it will attempt 1.555.
With the news coming in the afternoon, the adverse effect on any negative reports is for the pound to attemp 1.53.
Monday, February 22, 2010
22 Feb 2010
GBP/USD Analysis:
The problem with Greece is still at the back of Euro. Asia market has open higher showing signs that traders are taking profits after the Chinese New year break.
Traders are generally cautious. I am expecting pound to keep within support of 1.53 and resistance of 1.55, which saw the pound swing in these range early this morning.
If WMA5 in the 1 hour chart can clear EMA55, potential pound can hit resistance at 1.55, but look as if WMA5 is going to squeeze around EMA21.
UK has some announcement on inflation, which more or less within expecation, so I don't see major cause for movement.
The problem with Greece is still at the back of Euro. Asia market has open higher showing signs that traders are taking profits after the Chinese New year break.
Traders are generally cautious. I am expecting pound to keep within support of 1.53 and resistance of 1.55, which saw the pound swing in these range early this morning.
If WMA5 in the 1 hour chart can clear EMA55, potential pound can hit resistance at 1.55, but look as if WMA5 is going to squeeze around EMA21.
UK has some announcement on inflation, which more or less within expecation, so I don't see major cause for movement.
Saturday, February 20, 2010
20 Feb 2010
GBP/USD Weekly Conclusions
The week end with the pound hitting new low, breaking 2 supports, one at 1.57 and the other at 1.55. It is now supported at 1.53, then 1.50
Friday morning start with a big drop and true to 19 Feb 2010, the pound ranged between 1.55 and 1.53. It hit low at 1.534 and 1.5477.
The week end with the pound hitting new low, breaking 2 supports, one at 1.57 and the other at 1.55. It is now supported at 1.53, then 1.50
Friday morning start with a big drop and true to 19 Feb 2010, the pound ranged between 1.55 and 1.53. It hit low at 1.534 and 1.5477.
Friday, February 19, 2010
19 Feb 2010
GBP/USD Analysis:
With last night after trading hours annoucement of Fed raising the interest rate by a quater of a percent, the dollars rally against the Euro and the pound.
The pound hit the resistance at 1.58 and broke the support at 1.553. With that the momentum is for the pound to test the next support at 1.536. At noon SGT, the price is 1.5426.
There are a number of afternnon Euro news and will the bear continues, with Greece problem still unsolved?
Some retracement may occurred at support line at 1.536, the price may be ranged within 1.55 and 1.53 for today. Therefore it will be good to short near 1.55 and long near 1.53, taking profits within range.
With last night after trading hours annoucement of Fed raising the interest rate by a quater of a percent, the dollars rally against the Euro and the pound.
The pound hit the resistance at 1.58 and broke the support at 1.553. With that the momentum is for the pound to test the next support at 1.536. At noon SGT, the price is 1.5426.
There are a number of afternnon Euro news and will the bear continues, with Greece problem still unsolved?
Some retracement may occurred at support line at 1.536, the price may be ranged within 1.55 and 1.53 for today. Therefore it will be good to short near 1.55 and long near 1.53, taking profits within range.
Friday, February 12, 2010
12 Feb 2010
GBP/USD
Euro slid as a statement issued by European leaders left open how the EU would respond to a fresh wave of speculative attacks against Greece or countries such as Spain and Portugal, which are also struggling to cut their budget deficits. - Bloomberg.
Things are not settled as there are no concrete plan to solve the problem.
Pound will continue to be bounded within 1.57 and 1.58. On the support it hinges on 1.55 and 1.56.
As such a break must occur before the pound take flight in any clear direction. Traders, however are cautious as everyone is waiting for something concrete to happen. As long as there is no concrete solution to the greece problem, it will be a wait and see situation.
UK has not lost its credit rating problem.
It will be good to trade bounce between 1.57 and 1.56 and prepare for relinguish position is a breakout happens at either 1.55 or 1.57.
Euro slid as a statement issued by European leaders left open how the EU would respond to a fresh wave of speculative attacks against Greece or countries such as Spain and Portugal, which are also struggling to cut their budget deficits. - Bloomberg.
Things are not settled as there are no concrete plan to solve the problem.
Pound will continue to be bounded within 1.57 and 1.58. On the support it hinges on 1.55 and 1.56.
As such a break must occur before the pound take flight in any clear direction. Traders, however are cautious as everyone is waiting for something concrete to happen. As long as there is no concrete solution to the greece problem, it will be a wait and see situation.
UK has not lost its credit rating problem.
It will be good to trade bounce between 1.57 and 1.56 and prepare for relinguish position is a breakout happens at either 1.55 or 1.57.
Thursday, February 11, 2010
11 Feb 2010
GBP/USD
The movement in Euro affects the pound.
The Euro finished lower as the lack of concrete news regarding the European Union’s plan to guarantee Greece’s debt caused investors to remain nervous and skeptical that a resolution would be reached over the next few days.
The pound hit the 1 hour EMA200 at 1.5765, but gave ground immediately to end the day back in the 1.56 region. Morning trading saw the pound gaining back to the resistance at EMA100 at the 1 hour chart.
Overall, the mood is cautious. Pound has not been able to clear the 1.57 resistance line and the Greece case may result in a big movement down.
Bernanke gave the dollar a boost after hinting that the Fed was gearing to hike interest rates as part of its exit strategy. While most investors have been trying to forecast when the Fed would begin raising the Fed Funds Rate, Bernanke surprised everyone by stating that the Fed may raise the discount rate charged on direct loans to commercial banks. This pressure down the pound during US trading hours.
The daily chart shows a support at 1.555 and a resistance at 1.574, then 1.585.
The movement in Euro affects the pound.
The Euro finished lower as the lack of concrete news regarding the European Union’s plan to guarantee Greece’s debt caused investors to remain nervous and skeptical that a resolution would be reached over the next few days.
The pound hit the 1 hour EMA200 at 1.5765, but gave ground immediately to end the day back in the 1.56 region. Morning trading saw the pound gaining back to the resistance at EMA100 at the 1 hour chart.
Overall, the mood is cautious. Pound has not been able to clear the 1.57 resistance line and the Greece case may result in a big movement down.
Bernanke gave the dollar a boost after hinting that the Fed was gearing to hike interest rates as part of its exit strategy. While most investors have been trying to forecast when the Fed would begin raising the Fed Funds Rate, Bernanke surprised everyone by stating that the Fed may raise the discount rate charged on direct loans to commercial banks. This pressure down the pound during US trading hours.
The daily chart shows a support at 1.555 and a resistance at 1.574, then 1.585.
Wednesday, February 10, 2010
10 Feb 2010
GBP/USD Analysis:
On Monday, the US Dow fell below 10,000 since 2009. It was after some annoucement that Greece will pull through, that gave some hope yesterday to boost it back to a +150 points.
The Euro and the pound also gain as a result.
However, the pound still has a lot of major resistance to clear below we see any bullish movement. The first is 1.574, then 1.586.
The hind side is that pound has already break the 1.57 support line and it is venerable for a break towards 1.54, the next major support.
There are not any major news supporting that the pound can move up. Most likely it will today for some profit taking.
On Monday, the US Dow fell below 10,000 since 2009. It was after some annoucement that Greece will pull through, that gave some hope yesterday to boost it back to a +150 points.
The Euro and the pound also gain as a result.
However, the pound still has a lot of major resistance to clear below we see any bullish movement. The first is 1.574, then 1.586.
The hind side is that pound has already break the 1.57 support line and it is venerable for a break towards 1.54, the next major support.
There are not any major news supporting that the pound can move up. Most likely it will today for some profit taking.
Thursday, February 04, 2010
4 Feb 2010
GBPUSD Analysis: @1430 SGT
It looked like the dollars is continued to strengthen. Euro has lost its lustre because of what happen in Greece and now Portgual. This affect the pound.
The lastest news on the UK economy is that it has start to grow. Figures released by the Office for National Statistics last week showed that the UK economy grew by 0.1% in the final three months of 2009. Now, the pound will braced for the Bank of England to call a halt to its emergency programme of money creation after pumping £200bn into Britain's struggling economy over the past year.
Technically, the pound failed to clear 1.62 last week and this week. It has now fallen back to 1.59 level. It is now supported at 1.58. London market is opening soon in an hour time (based on the time I write this analysis), if it takes the news well, rebound is possible and we can expected the pound to hit back to 1.60.
Watch on the other hand if pound fall below 1.57. A break below that level will see the pound going towards 1.55/54.
Boundary for today at 1.60 and 1.58. The day chart shows that the pound will move within this range until a break out occur. We can therefore trade within this range, but prepare to close long position if pound goes below 1.58 or short position if pound breaks 1.60 today.
It looked like the dollars is continued to strengthen. Euro has lost its lustre because of what happen in Greece and now Portgual. This affect the pound.
The lastest news on the UK economy is that it has start to grow. Figures released by the Office for National Statistics last week showed that the UK economy grew by 0.1% in the final three months of 2009. Now, the pound will braced for the Bank of England to call a halt to its emergency programme of money creation after pumping £200bn into Britain's struggling economy over the past year.
Technically, the pound failed to clear 1.62 last week and this week. It has now fallen back to 1.59 level. It is now supported at 1.58. London market is opening soon in an hour time (based on the time I write this analysis), if it takes the news well, rebound is possible and we can expected the pound to hit back to 1.60.
Watch on the other hand if pound fall below 1.57. A break below that level will see the pound going towards 1.55/54.
Boundary for today at 1.60 and 1.58. The day chart shows that the pound will move within this range until a break out occur. We can therefore trade within this range, but prepare to close long position if pound goes below 1.58 or short position if pound breaks 1.60 today.
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