9 Dec 2016

9 Dec 2016 GBP/USD

The morning start with a spike up to 1.267 because of a better than expected UK RISC (housing) at 0800 SGT. It show a recovery from the Brexit. Though there was no major news in the afternoon affecting the pound, it continue to hit high at 1.27 (the first resistance, the second one being 1.278 EMA100).

It was the news from the US that reverse the direction. Unemployment claims remains the same. On the stock markets, the DOW, the Nasdaq all made records high, indicating a more confident US economy.

The pound hit a low yesterday at 1.255.

With a quiet Europe front till 1730 for UK construction output, which is expected to remains the same.

CCI continue to give an indicator for the pound to move lower. But the movement is strongly support by both EMA21 and EMA55 which now converge at 1.255. The fib retracement from 1.2775 to 1.2305 is 1.254 at 50% retracement.

So if a break below this strong support will move the level of support to 1.248.

On the contrary, 1.266 (Fib retracement 23.6%) and 1.272 (EMA100) is the resistance.

I am expecting some side movement within 1.254 and 1.260, which is my expectation of the strength of the pound for this period of time before Fed changes the interest rate or after next March Brexit negotiation.