10 Mar 2010

GBP/USD Analysis:
The Euro was down early as traders took a more cautious view of the Euro Region economy now that the fiscal problems in Greece have subsided. Traders are citing the possibility of an uneven recovery in the economy as one of the reasons for the weakness. They are worried that the European Central Bank faces too many upcoming challenges regarding growth and inflation to trigger a reasonable appreciation in the Euro.

We have news today 1730hrs UK Manufacturing Production. Production surprised with a nice rise of 0.9% last month, and is now predicted to get back to slower growth – 0.3%. Note that the Industrial Production figure contains manufacturing (80%) and other sectors, but the manufacturing number is eyed.

A better than expected results may give the pound a boost towards 1.503. The pound has attempt to break EMA21 on the 1 hour chart, but failed. It may attempt today.

If failed, the pound may revert back to support level at 1.49 then 1.48.

My expectation: The pound will be traded in range between 1.48 and 1.50, generally it still show sign of bearish.