5 Mar 2010

GDP/USD Analysis:
The U.S. Dollar was up sharply against all major currencies as investors flocked to safer assets following a poor housing report and concerns about Greece’s ability to shore up its budget deficit. More the most part, it was a quiet trade on Thursday as many big Forex players stood on the sidelines ahead of Friday’s U.S. Non-Farm Payrolls Report.

The UK MPC said it was maintaining its stock of asset purchases at £200bn, and held interest rates at 0.5pc . Both decisions were expected.

GBP saw a back off its recovery high at 1.5129 on Thursday, its recovery tone set from the 1.4782 level, its 2010 low continues to be maintained. It fell below 1.506 and went to a yesterday low of 1.503, before recovering back to 1.505.

Yesterday Analysis: The pound did not maintain the price at 1.517 and 1.506. It hit high at 1.513, break 1.506 and dive to 1.503.

Today expectation: A good support is at 1.503, then 1.500/1.4900. It nows has its EMA21 breaking EMA55 in the 1 hour chart. I expected the EMA21 to break down further.

On the high side, resistance is at 1.506, then 1.5100.

If afternoon news at 1730hrs SGT on UK PPI, Britain’s producer prices are expected to calm down after rising by 2% last month (PPI Input). Given the rise in consumer prices, the expected rise of 0.1% in the upcoming decision could be exceeded with a higher number. If that is the case, I am expecting the price to hit support at around 1.503 and rebound to resistance, before yelding gain in the US trading time.