As mentioned in last week post, the pound is going for a uptrend. It starts to reverse at 1.6460 and has hit a high at 1.6650. The indicator that helps predict this is the daily CCI(14) coupled with two BB around it with 0.9 and 1.2. An oversold occur and when the CCI hits the first BB band, it is a good buy till the CCI exit the top most BB and the CCI gradient reverse (which has yet to).
The first buy was on the 14 Mar around the price of 1.6620 (a quarter of my available margin) and a second buy on 24 Mar around 1.6480.
I can still wait for the reverse signal, but as it is nearing the end of the month, the opportunity came to close the first buy at 1.6642 and half of the second buy at 1.6600. I am leaving the rest for the reverse signal or till the last Friday of the month which is today.
It is a 2 weeks of roller coaster. The first was Ms Yellen speech and indication that the Fed rates will rises on the 20 Mar. This brought the pound down. It was followed by a series of better to do US unemployment claims but contradicted US homes sales . So it gives ground to continue to support a buy.
The week 23 Mar open with the UK CPI maintain low at 1.7%. The boost came from the UK retail data which indicate a good confidence than expected.
Today, we have one big news on the UK current money supply at 1730hrs SGT. It is directly linked to currency demand and is expected to continue a rising trend in surplus which indicates that foreigners are buying more of the domestic currency to execute transactions in UK.
As such it is still a good buy, but because it is nearing the end of the uptrend (CCI is out of the BB) a reversal is possible. Using Fib retracement, the support is at 1.6575 (50%) which is also the daily EMA21 and EMA55 (merging two lines indicating strong support). As such a good buy region.
On the sell side, resistance is at around 1.6680/ 1.6700, the half way between Fib Retracement.
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