20 Apr 2011

GBP/USD Analysis
After the attempt at support at 1.618 and 1.623, the pound rebound and maintain price at 1.627 and now 1.632.

THe daily CCI is out of the BB lower line, an indication that the down trend has ended. But CCI remain high at above a positive figure of 53. It look as if the support is at 1.627/30 or the daily EMA21.

Today there is 2 major news. One at 1630hrs SGT on UK MPC voting and the other at 2200hrs SGT on US existing home sales.

A change in the MPC voting will trigger the intention to raise interest rates and may cause the pound to go high. Resistance is at 1.64, and if broken, it will be a whole new level with 1.64 as the support.

On the US, Sales of existing homes in the world’s largest economy is expected to increase at an annualized pace of 5.00M from 4.88M, and the rebound in purchases could spark a bullish reaction in the U.S. dollar as growth prospects improve. This move will pull the pound back from 1.64 to support at 1.632/30

A safe way to trade is to sell at resistance and buy at support after reversal at support.