GBP/USD Analysis:
The British economy is still growing despite a surge of disappointing economic data. The National Institute of Economic and Social Research (NIESR) said that GDP grew by 0.3 per cent between December and February, compared with the preceding three-month period.
If the economy maintains momentum this month, economic growth for the first quarter of the year would match GDP in the final quarter of 2009.
But NIESR said that although the recession was over, the country would not rebuild total economic output to the levels seen before the slowdown for another two years, leaving the country in "a period of depression" until then.
Containerized trade volumes in and out of the U.S. softened alongside seasonal demand at several major ports in January, but compared to a year ago, broader trends of rebounding exports and stabilizing imports are surfacing, according to port officials.
Overall, it means a shift to the dollars for safety as UK struggles on both ends.
The 1 hour chart shows the WMA5 in between EMA21 and EMA55. A sign of unsure direction contained between 1.4985 and 1.4964. A break in this resistance and support will bring the price to the next level at 1.501 and 1.488.
My expectation: Both Eur and GBP is unsure. Daily chart show formation of doji. Trade and take small profit and ready to let go if direction is against you.
Thursday, March 11, 2010
Wednesday, March 10, 2010
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.
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.
Tuesday, March 09, 2010
9 Mar 2010
GBP/USD Analysis:
A strong dollar rally came into the mid-session of US trading as traders backed away from higher risk assets. Comments from German Chancellor Angela Merkel may have been the catalyst behind the weakness in the Euro. Merkel said that a Greek bailout is not on the table and pointed toward the no bailout rule in the European Union agreement as the reason behind her comment.
Another reason for the mid-session weakness in the Euro may have been comments from Greek Prime Minister Papadreou who hinted that he’d be willing to turn toward the International Monetary Fund for help if the EU didn’t come through with financial aid. His comments were most likely designed to light a fire under the EU to take action sooner.
The pound was heading towards 1.52, before the rally, dropping the pound by almost a 160 pips.
The British Pound continues to remain the weakest currency because of the poor U.K. economy, the widening budget deficit, a dovish monetary policy and political uncertainty.
From the technicals, dispersion in the upwards direction has disappear and now from the 1 hour chart, both WMA5 and EMA21 has gone below EMA100 and EMA55. Even EMA55 is appearing weak and clearing EMA100.
Support is at 1.50/1.49 region. Moving further will be breaking 1.478, going to 1.45 region.
Resistance is at 1.508, ten 1.513.
My expectation: Its a empty news day. The pound may range within 1.500 and 1.508. The only news is at 1730hrs, UK Trade balance. The British deficit rose to 7.3 billion last month, and it’s now expected to drop back to to 6.9. A deficit in trade balance is normal for Britain.
A strong dollar rally came into the mid-session of US trading as traders backed away from higher risk assets. Comments from German Chancellor Angela Merkel may have been the catalyst behind the weakness in the Euro. Merkel said that a Greek bailout is not on the table and pointed toward the no bailout rule in the European Union agreement as the reason behind her comment.
Another reason for the mid-session weakness in the Euro may have been comments from Greek Prime Minister Papadreou who hinted that he’d be willing to turn toward the International Monetary Fund for help if the EU didn’t come through with financial aid. His comments were most likely designed to light a fire under the EU to take action sooner.
The pound was heading towards 1.52, before the rally, dropping the pound by almost a 160 pips.
The British Pound continues to remain the weakest currency because of the poor U.K. economy, the widening budget deficit, a dovish monetary policy and political uncertainty.
From the technicals, dispersion in the upwards direction has disappear and now from the 1 hour chart, both WMA5 and EMA21 has gone below EMA100 and EMA55. Even EMA55 is appearing weak and clearing EMA100.
Support is at 1.50/1.49 region. Moving further will be breaking 1.478, going to 1.45 region.
Resistance is at 1.508, ten 1.513.
My expectation: Its a empty news day. The pound may range within 1.500 and 1.508. The only news is at 1730hrs, UK Trade balance. The British deficit rose to 7.3 billion last month, and it’s now expected to drop back to to 6.9. A deficit in trade balance is normal for Britain.
Monday, March 08, 2010
8 Mar 2010
GBP/USD Analysis:
The week end with a surprise recover of the pound back and above 1.515.
Today will be a quiet day with no major European news. SO its all technical.
Looking at the 1 hour chart, showed the pound on a break up above EMA200. However, the daily chart showed a resistance at EMA21 at 1.524.
Euro has too recover from its low of 1.34 to 1.37. The pound will mostly likely make a high towards resistance.
On the down side, support is at 1.514/12 region, before any break down towards 1.507
The week end with a surprise recover of the pound back and above 1.515.
Today will be a quiet day with no major European news. SO its all technical.
Looking at the 1 hour chart, showed the pound on a break up above EMA200. However, the daily chart showed a resistance at EMA21 at 1.524.
Euro has too recover from its low of 1.34 to 1.37. The pound will mostly likely make a high towards resistance.
On the down side, support is at 1.514/12 region, before any break down towards 1.507
Friday, March 05, 2010
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.
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.
Thursday, March 04, 2010
4 Mar 2010
GBP/USD Analysis:
The pound inched a notch up yesterday during US trading hours. Price range was hovering bwtween 1.500 and 1.508, before it break resistance at 1.508 and stayed above it.
Today at 2000hrs SGT, The Bank of England will announce later whether it will raise interest rates, but is expected to keep the cost of borrowing at a record low of 0.5%. The Bank is also expected to say it will not pump any more money into the economy under its quantitative easing (QE) programme, for now at least. Last month, the Bank said it was halting the programme, having spent £200bn to boost the economy. It added the programme may be extended in the future, if needed.
Before at 1700hrs, UK Halifax HPI a leading housing indicator, because rising house prices attract investors and spur industry activity. It is expected to improve from last month result.
Technically, the pound beat EMA55 at the 1 hour chart and managed to stay above it at 1.500/1.502. During US trading hours, EMA21 beat resistance and EMA100. The pound now stays above EMA100 at 1.508.
The Euro on the other hand has get rid of dispersion and look as if it is going bullish. The Euro rose to its highest level since February 17th as shorts covered positions after Greece announced additional budget cuts and tax increases in an attempt to shore up its budget and gain favors from the European Union.
Greece’s new plan to take control of its fiscal problems drew positive comments from Luxembourg’s Jean-Claude Juncker who said “Greece’s ambitious program to correct its fiscal imbalances is now credibly on track.”
It look like the pound is set in a bullish tone. Resistance is hampered at EMA200 at 1.517.
A good support is at 1.508/06 region. Felling beyond 1.506, may return the pound to its bearish sentiments and the next support is at 1.500.
Yesterday prediction: Accurate that the pound range within 1.500 and 1.508, before US trading hours to zoom past 1.508 to 1.512, before returning to 1.508.
Today Expectation: Price range within 1.506 and 1.517. Potential to retrace to 1.517 based on Fib on 19 Jan 2010 peak to 1 Mar low.
The pound inched a notch up yesterday during US trading hours. Price range was hovering bwtween 1.500 and 1.508, before it break resistance at 1.508 and stayed above it.
Today at 2000hrs SGT, The Bank of England will announce later whether it will raise interest rates, but is expected to keep the cost of borrowing at a record low of 0.5%. The Bank is also expected to say it will not pump any more money into the economy under its quantitative easing (QE) programme, for now at least. Last month, the Bank said it was halting the programme, having spent £200bn to boost the economy. It added the programme may be extended in the future, if needed.
Before at 1700hrs, UK Halifax HPI a leading housing indicator, because rising house prices attract investors and spur industry activity. It is expected to improve from last month result.
Technically, the pound beat EMA55 at the 1 hour chart and managed to stay above it at 1.500/1.502. During US trading hours, EMA21 beat resistance and EMA100. The pound now stays above EMA100 at 1.508.
The Euro on the other hand has get rid of dispersion and look as if it is going bullish. The Euro rose to its highest level since February 17th as shorts covered positions after Greece announced additional budget cuts and tax increases in an attempt to shore up its budget and gain favors from the European Union.
Greece’s new plan to take control of its fiscal problems drew positive comments from Luxembourg’s Jean-Claude Juncker who said “Greece’s ambitious program to correct its fiscal imbalances is now credibly on track.”
It look like the pound is set in a bullish tone. Resistance is hampered at EMA200 at 1.517.
A good support is at 1.508/06 region. Felling beyond 1.506, may return the pound to its bearish sentiments and the next support is at 1.500.
Yesterday prediction: Accurate that the pound range within 1.500 and 1.508, before US trading hours to zoom past 1.508 to 1.512, before returning to 1.508.
Today Expectation: Price range within 1.506 and 1.517. Potential to retrace to 1.517 based on Fib on 19 Jan 2010 peak to 1 Mar low.
Wednesday, March 03, 2010
3 Mar 2010
GBP/USD Analysis:
UK consumer confidence in February rose for the second consecutive month to hit its highest level since January 2008, according to the Nationwide Consumer Confidence survey. This news at 0801hrs SGT gave a boost to the pound, raising it above 1.500, hitting high at 1.5048.
Looking at its counterpart, the Euro cleared the 1 hour chart EMA200 and recovered from its low to hit back at 1.365 from 1.343.
Has traders forgotten the Greece problem? Or is this an opportunity for risk taking? Or a major retracement is on the way?
Yesterday analysis: In fact the whole day, the pound has been hovering around 1.485 and 1.495 as expected. The up movement only start this morning.
Today expectation: With UK service PMI release at 1730hrs SGT, the services sector, which includes the financial services sector, has seen improvement, rising above 56 points but then dropping to 54.5 last month. It’s predicted to edge up to 55 points, showing stability.
Potentially, the pound which now hover above EMA21 (1 hour chart), may break EMA55 to meet resistance at 1.508, than 1.519.
Support on the other hand is at 1.487, which breaking this may sent a big C-wave down to 1.43.
Price range may be contain within 1.500 and 1.508, which means that the pound will continue its way up. The decision for any direction will depends on Europe opening or the UK news. The new direction may be set during US opening.
UK consumer confidence in February rose for the second consecutive month to hit its highest level since January 2008, according to the Nationwide Consumer Confidence survey. This news at 0801hrs SGT gave a boost to the pound, raising it above 1.500, hitting high at 1.5048.
Looking at its counterpart, the Euro cleared the 1 hour chart EMA200 and recovered from its low to hit back at 1.365 from 1.343.
Has traders forgotten the Greece problem? Or is this an opportunity for risk taking? Or a major retracement is on the way?
Yesterday analysis: In fact the whole day, the pound has been hovering around 1.485 and 1.495 as expected. The up movement only start this morning.
Today expectation: With UK service PMI release at 1730hrs SGT, the services sector, which includes the financial services sector, has seen improvement, rising above 56 points but then dropping to 54.5 last month. It’s predicted to edge up to 55 points, showing stability.
Potentially, the pound which now hover above EMA21 (1 hour chart), may break EMA55 to meet resistance at 1.508, than 1.519.
Support on the other hand is at 1.487, which breaking this may sent a big C-wave down to 1.43.
Price range may be contain within 1.500 and 1.508, which means that the pound will continue its way up. The decision for any direction will depends on Europe opening or the UK news. The new direction may be set during US opening.
Tuesday, March 02, 2010
2 Mar 2010
GBP/USD Analysis:
The pound fell by almost 300 pips, hitting low at 1.48, before regaining back to 1.500. Now it stand at 1.49 for the first time in nearly a year amid fears that Britain will be left with a weak government unable to cut spending and balance the budget.
Fears that no party would gain an overall Commons majority led to warnings that the pound was “staring into the abyss” and would fall further still.
The new support is 1.452, another 300 pips down. Today, given at 1730 UK Construction PMI, contrary to the prices of homes and PMI in manufacturing, purchasing managers in the construction sector are still pessimistic. The figure is expected to edge up from 48.6 to 48.9 points, still under 50. This may be a trigger point for pound to sink further.
Resistance is at 1.498 then 1.506.
Yesterday expectation: The pound hit and sank below 1.500.
Today expectation: Price range to hover between 1.485 and 1.495, till Europe news are release which may sent the pound further to the next level of support at around 1.47/1.46
The pound fell by almost 300 pips, hitting low at 1.48, before regaining back to 1.500. Now it stand at 1.49 for the first time in nearly a year amid fears that Britain will be left with a weak government unable to cut spending and balance the budget.
Fears that no party would gain an overall Commons majority led to warnings that the pound was “staring into the abyss” and would fall further still.
The new support is 1.452, another 300 pips down. Today, given at 1730 UK Construction PMI, contrary to the prices of homes and PMI in manufacturing, purchasing managers in the construction sector are still pessimistic. The figure is expected to edge up from 48.6 to 48.9 points, still under 50. This may be a trigger point for pound to sink further.
Resistance is at 1.498 then 1.506.
Yesterday expectation: The pound hit and sank below 1.500.
Today expectation: Price range to hover between 1.485 and 1.495, till Europe news are release which may sent the pound further to the next level of support at around 1.47/1.46
Monday, March 01, 2010
1 Mar 2010
GBP/USD Analysis:
With news at 1730hrs SGT on UK Manufacturing PMI, and 1800hrs SGT on Euro unemployment looming for not better than expected result, it look like the pound is not going anywnere north.
My expectation is foreign exchange markets are likely to keep up the pressure on sterling, until they see the detailed tax and spending plans of whatever government takes power.
Support is at 1.500, with resistance at 1.520, then 1.525. The pound is likely to go south today unless a stronger than expected news push it up to and above 1.525.
With news at 1730hrs SGT on UK Manufacturing PMI, and 1800hrs SGT on Euro unemployment looming for not better than expected result, it look like the pound is not going anywnere north.
My expectation is foreign exchange markets are likely to keep up the pressure on sterling, until they see the detailed tax and spending plans of whatever government takes power.
Support is at 1.500, with resistance at 1.520, then 1.525. The pound is likely to go south today unless a stronger than expected news push it up to and above 1.525.
Saturday, February 27, 2010
27 Feb 2010
GBP/USD
What happen in UK?
There were expectations for an upwards revision to 0.2%, and the outcome was better than expected – 0.3%. GBP/USD rose towards the release, but fell back after it. The move was from 1.5250 to 1.5315 and back down afterwards.
The reason is mostly technical: After breaching the important support line at 1.5350 on Thursday morning, this line turned into a strong line of resistance. As the Pound got close to it, stop orders sent it back down.
This important release wasn’t enough to send it higher. GBP/USD is now trading in a range between 1.5350 and 1.5230. It already went lower – 1.5189. This is another support line.
What happened in US?
There is little evidence that the U.S. economy has recovered from the recession or is going to recover from the recession anytime soon. The support for the recovery viewpoint comes from government statistics that have been highly manipulated. All governments, of course, want to present a rosy picture of their handling of the economy for political reasons and it is much easier to make the numbers better than it is to actually make the economy better. Eventually the public catches on to this game, however. The recent consumer confidence numbers indicate that the American public is no longer buying the public relations story, but is starting to pay more attention to the realities they have to face on a day to day basis.
Yesterday Analysis: "Watch and if possible catch the wave to its next suport or resistance line."
Pound failed to breach resistance at 1.530, so it was a wave down from 1.530 to a low of 1.515
What happen in UK?
There were expectations for an upwards revision to 0.2%, and the outcome was better than expected – 0.3%. GBP/USD rose towards the release, but fell back after it. The move was from 1.5250 to 1.5315 and back down afterwards.
The reason is mostly technical: After breaching the important support line at 1.5350 on Thursday morning, this line turned into a strong line of resistance. As the Pound got close to it, stop orders sent it back down.
This important release wasn’t enough to send it higher. GBP/USD is now trading in a range between 1.5350 and 1.5230. It already went lower – 1.5189. This is another support line.
What happened in US?
There is little evidence that the U.S. economy has recovered from the recession or is going to recover from the recession anytime soon. The support for the recovery viewpoint comes from government statistics that have been highly manipulated. All governments, of course, want to present a rosy picture of their handling of the economy for political reasons and it is much easier to make the numbers better than it is to actually make the economy better. Eventually the public catches on to this game, however. The recent consumer confidence numbers indicate that the American public is no longer buying the public relations story, but is starting to pay more attention to the realities they have to face on a day to day basis.
Yesterday Analysis: "Watch and if possible catch the wave to its next suport or resistance line."
Pound failed to breach resistance at 1.530, so it was a wave down from 1.530 to a low of 1.515
Friday, February 26, 2010
26 Feb 2010
GBP/USD Analysis:
News from Euro and UK are enough to see why the weakness in these currencies.
In the UK, "London Capital profit falls, not to pay final dividend", Fears mounted Thursday that Britain may not have emerged from recession at the end of 2009 after all, as statistics showed a dramatic fall in business investment in the last three months of the year.
In Euro, EUR/USD has priced in the possibility of the unthinkable: the default of a member of the euro zone.
From the daily chart pound has broken below key support in the 1.5350 price region. It went as low as 1.5200, only to recover back to 1.526 this morning, given the uneasiness about the economy.
Global markets retreated earlier this month because traders were worried about Greece's debt problems. The market's drop early in the week, a rebound and the latest slide signal that investors are waiting for clearer information on the direction of the economy.
Yesterday analysis: Indeed, "I am not expecting the pound to do well today and may test new low at 1.535/30 region.".
Today expectation: Its Friday and everyone will be waiting for some outcome in the Euro zone on Greece. Any news will sent the pound in either direction. There are UK news on Consumer Confidence at 0800 SGT and UK Nationwide HPI at 1500hrs SGT. This are signs of the UK economy.
Support now lies at 1.505 and it is only about 200 pips which is quick possible for pound to test it today.
On the up side, the pound did its first Fib retrecement to 1.526 this morning. The next is at 1.530 (EMA21) and 1.533 (EMA55).
My expectation: Watch and if possible catch the wave to its next suport or resistance line.
News from Euro and UK are enough to see why the weakness in these currencies.
In the UK, "London Capital profit falls, not to pay final dividend", Fears mounted Thursday that Britain may not have emerged from recession at the end of 2009 after all, as statistics showed a dramatic fall in business investment in the last three months of the year.
In Euro, EUR/USD has priced in the possibility of the unthinkable: the default of a member of the euro zone.
From the daily chart pound has broken below key support in the 1.5350 price region. It went as low as 1.5200, only to recover back to 1.526 this morning, given the uneasiness about the economy.
Global markets retreated earlier this month because traders were worried about Greece's debt problems. The market's drop early in the week, a rebound and the latest slide signal that investors are waiting for clearer information on the direction of the economy.
Yesterday analysis: Indeed, "I am not expecting the pound to do well today and may test new low at 1.535/30 region.".
Today expectation: Its Friday and everyone will be waiting for some outcome in the Euro zone on Greece. Any news will sent the pound in either direction. There are UK news on Consumer Confidence at 0800 SGT and UK Nationwide HPI at 1500hrs SGT. This are signs of the UK economy.
Support now lies at 1.505 and it is only about 200 pips which is quick possible for pound to test it today.
On the up side, the pound did its first Fib retrecement to 1.526 this morning. The next is at 1.530 (EMA21) and 1.533 (EMA55).
My expectation: Watch and if possible catch the wave to its next suport or resistance line.
Thursday, February 25, 2010
25 Feb 2010
GBP/USD Analysis:
With Euro and UK under strikes and walkout, recover of the economy is seriously in question. Added to the woes are reports of stagnant consumer spending and confidence.
Before Fed chairman spoke, pound was hovering between 1.548 and 1.540. The U.S. Dollar regained most of its mid-session loss to finish only slightly worse than Tuesday. Comments from Fed Chairman Bernanke triggered an early session break after he reiterated the Fed’s stance that interest rates would remain low for an “extended period”.
Yesterday Analysis: Indeed, the pound range within 1.540 and 1.548 before US trading. It attempted EMA100 and EMA200 but failed. During US trading, it finally break support at 1.540.
Today expectation: Support at critical level at 1.535 / 1.530. If broken, expect the pound to hit a new low at 1.505!
Of course the resistance is at 1.545/ 1.550 (1 hour chart EMA100 /EMA200 )
The news in the afternooon is not so pleasing to either the Euro or the pound. German Unemployment Change: Published on Thursday at 1655 SGT. After 6 straight months of drop in unemployment, a rise of 6000 people was seen last month. This negative will probably be continued with another rise – 18,000 this time. Yet another weak figure from this big country, which nicely fits into the double-digit European unemployment rate.
At 1700hrs SGT BOE Gov King Speaks. With the economy barely crawling out of recession, a rapid fiscal retrenchment would be treated to a "savage" reaction in foreign exchange markets.With confidence in British policymaking gone, the pound would risk plunging to 1.50 against the dollar.
Therfore, I am not expecting the pound to do well today and may test new low at 1.535/30 region.
With Euro and UK under strikes and walkout, recover of the economy is seriously in question. Added to the woes are reports of stagnant consumer spending and confidence.
Before Fed chairman spoke, pound was hovering between 1.548 and 1.540. The U.S. Dollar regained most of its mid-session loss to finish only slightly worse than Tuesday. Comments from Fed Chairman Bernanke triggered an early session break after he reiterated the Fed’s stance that interest rates would remain low for an “extended period”.
Yesterday Analysis: Indeed, the pound range within 1.540 and 1.548 before US trading. It attempted EMA100 and EMA200 but failed. During US trading, it finally break support at 1.540.
Today expectation: Support at critical level at 1.535 / 1.530. If broken, expect the pound to hit a new low at 1.505!
Of course the resistance is at 1.545/ 1.550 (1 hour chart EMA100 /EMA200 )
The news in the afternooon is not so pleasing to either the Euro or the pound. German Unemployment Change: Published on Thursday at 1655 SGT. After 6 straight months of drop in unemployment, a rise of 6000 people was seen last month. This negative will probably be continued with another rise – 18,000 this time. Yet another weak figure from this big country, which nicely fits into the double-digit European unemployment rate.
At 1700hrs SGT BOE Gov King Speaks. With the economy barely crawling out of recession, a rapid fiscal retrenchment would be treated to a "savage" reaction in foreign exchange markets.With confidence in British policymaking gone, the pound would risk plunging to 1.50 against the dollar.
Therfore, I am not expecting the pound to do well today and may test new low at 1.535/30 region.
Wednesday, February 24, 2010
24 Feb 2010
GBP/USD Analysis:
The GBP/USD shedded more than 160 pips as an aftermath of disappointing releases, dragged down by Euro.
The German Ifo Business Climate came in lower than expected and lower than the previous release. With strikes going on by the airlines, recovery may be bogged down.
US CB Consumer Confidence suffered a setback. Lower than expected, lower than the previous release, it caused the Dow to fell more than 100 points.
Today brings more releases to test the fragile sentiments. Featuring releases such as Industrial New Orders for the Euro and New Home Sales for the US. Fed Chairman Bernanke is due to testify too.
Yesterday Accuracy report: Indeed the pound attempt 1.555, it hit high at 1.557, but fell back to 1.54 below the 1.550 support line after setback in news releases.
Today: Support now stands at 1.540, which can easily breach and the next at 1.530, possible if the news releases are less positive.
Resistance is at 1.548, then 1.555.
In a most likely situation, pound will stay within 1.540 and 1.548 before the news releases. General sentiments are bearish.
The GBP/USD shedded more than 160 pips as an aftermath of disappointing releases, dragged down by Euro.
The German Ifo Business Climate came in lower than expected and lower than the previous release. With strikes going on by the airlines, recovery may be bogged down.
US CB Consumer Confidence suffered a setback. Lower than expected, lower than the previous release, it caused the Dow to fell more than 100 points.
Today brings more releases to test the fragile sentiments. Featuring releases such as Industrial New Orders for the Euro and New Home Sales for the US. Fed Chairman Bernanke is due to testify too.
Yesterday Accuracy report: Indeed the pound attempt 1.555, it hit high at 1.557, but fell back to 1.54 below the 1.550 support line after setback in news releases.
Today: Support now stands at 1.540, which can easily breach and the next at 1.530, possible if the news releases are less positive.
Resistance is at 1.548, then 1.555.
In a most likely situation, pound will stay within 1.540 and 1.548 before the news releases. General sentiments are bearish.
Tuesday, February 23, 2010
23 Feb 2010
GBP/USD Analysis:
Yesterday: The pound as predicted keep within trading range of 1.55 and 1.53. It did not go below 1.54 but instead attempt to break 1.552, which is EMA100 on the 1 hour chart.
Today: Both French and Germany are expected to report consumer spending and business climate respectively. Numbers are expected to fall. Greece still doesn’t have a backstop plan and there’s a lack of concrete details coming from Germany and France.
UK MPC is expected to report on inflation. Inflation is up in the UK, however the Bank of England is ignoring this fact on the basis that they believe it to only be temporary. Expect more of this talk and that they will keep rates steady for some time.
There has been no change in the fundamentals. The budget deficit, weak economy and lack of confidence in the Bank of England are still the catalysts behind the weakness in the British Pound.
In the absence of news, the pound did an attempt on EMA100 on the 1 hour chart. It hit high at 1.552 and current WMA5 hovers between EMA100 and EMA55/EMA21.
Support is therefore at 1.548/1.546, while resistance is at 1.550/1.552. If a breakout occur at 1.552, then it will attempt 1.555.
With the news coming in the afternoon, the adverse effect on any negative reports is for the pound to attemp 1.53.
Yesterday: The pound as predicted keep within trading range of 1.55 and 1.53. It did not go below 1.54 but instead attempt to break 1.552, which is EMA100 on the 1 hour chart.
Today: Both French and Germany are expected to report consumer spending and business climate respectively. Numbers are expected to fall. Greece still doesn’t have a backstop plan and there’s a lack of concrete details coming from Germany and France.
UK MPC is expected to report on inflation. Inflation is up in the UK, however the Bank of England is ignoring this fact on the basis that they believe it to only be temporary. Expect more of this talk and that they will keep rates steady for some time.
There has been no change in the fundamentals. The budget deficit, weak economy and lack of confidence in the Bank of England are still the catalysts behind the weakness in the British Pound.
In the absence of news, the pound did an attempt on EMA100 on the 1 hour chart. It hit high at 1.552 and current WMA5 hovers between EMA100 and EMA55/EMA21.
Support is therefore at 1.548/1.546, while resistance is at 1.550/1.552. If a breakout occur at 1.552, then it will attempt 1.555.
With the news coming in the afternoon, the adverse effect on any negative reports is for the pound to attemp 1.53.
Monday, February 22, 2010
22 Feb 2010
GBP/USD Analysis:
The problem with Greece is still at the back of Euro. Asia market has open higher showing signs that traders are taking profits after the Chinese New year break.
Traders are generally cautious. I am expecting pound to keep within support of 1.53 and resistance of 1.55, which saw the pound swing in these range early this morning.
If WMA5 in the 1 hour chart can clear EMA55, potential pound can hit resistance at 1.55, but look as if WMA5 is going to squeeze around EMA21.
UK has some announcement on inflation, which more or less within expecation, so I don't see major cause for movement.
The problem with Greece is still at the back of Euro. Asia market has open higher showing signs that traders are taking profits after the Chinese New year break.
Traders are generally cautious. I am expecting pound to keep within support of 1.53 and resistance of 1.55, which saw the pound swing in these range early this morning.
If WMA5 in the 1 hour chart can clear EMA55, potential pound can hit resistance at 1.55, but look as if WMA5 is going to squeeze around EMA21.
UK has some announcement on inflation, which more or less within expecation, so I don't see major cause for movement.
Saturday, February 20, 2010
20 Feb 2010
GBP/USD Weekly Conclusions
The week end with the pound hitting new low, breaking 2 supports, one at 1.57 and the other at 1.55. It is now supported at 1.53, then 1.50
Friday morning start with a big drop and true to 19 Feb 2010, the pound ranged between 1.55 and 1.53. It hit low at 1.534 and 1.5477.
The week end with the pound hitting new low, breaking 2 supports, one at 1.57 and the other at 1.55. It is now supported at 1.53, then 1.50
Friday morning start with a big drop and true to 19 Feb 2010, the pound ranged between 1.55 and 1.53. It hit low at 1.534 and 1.5477.
Friday, February 19, 2010
19 Feb 2010
GBP/USD Analysis:
With last night after trading hours annoucement of Fed raising the interest rate by a quater of a percent, the dollars rally against the Euro and the pound.
The pound hit the resistance at 1.58 and broke the support at 1.553. With that the momentum is for the pound to test the next support at 1.536. At noon SGT, the price is 1.5426.
There are a number of afternnon Euro news and will the bear continues, with Greece problem still unsolved?
Some retracement may occurred at support line at 1.536, the price may be ranged within 1.55 and 1.53 for today. Therefore it will be good to short near 1.55 and long near 1.53, taking profits within range.
With last night after trading hours annoucement of Fed raising the interest rate by a quater of a percent, the dollars rally against the Euro and the pound.
The pound hit the resistance at 1.58 and broke the support at 1.553. With that the momentum is for the pound to test the next support at 1.536. At noon SGT, the price is 1.5426.
There are a number of afternnon Euro news and will the bear continues, with Greece problem still unsolved?
Some retracement may occurred at support line at 1.536, the price may be ranged within 1.55 and 1.53 for today. Therefore it will be good to short near 1.55 and long near 1.53, taking profits within range.
Friday, February 12, 2010
12 Feb 2010
GBP/USD
Euro slid as a statement issued by European leaders left open how the EU would respond to a fresh wave of speculative attacks against Greece or countries such as Spain and Portugal, which are also struggling to cut their budget deficits. - Bloomberg.
Things are not settled as there are no concrete plan to solve the problem.
Pound will continue to be bounded within 1.57 and 1.58. On the support it hinges on 1.55 and 1.56.
As such a break must occur before the pound take flight in any clear direction. Traders, however are cautious as everyone is waiting for something concrete to happen. As long as there is no concrete solution to the greece problem, it will be a wait and see situation.
UK has not lost its credit rating problem.
It will be good to trade bounce between 1.57 and 1.56 and prepare for relinguish position is a breakout happens at either 1.55 or 1.57.
Euro slid as a statement issued by European leaders left open how the EU would respond to a fresh wave of speculative attacks against Greece or countries such as Spain and Portugal, which are also struggling to cut their budget deficits. - Bloomberg.
Things are not settled as there are no concrete plan to solve the problem.
Pound will continue to be bounded within 1.57 and 1.58. On the support it hinges on 1.55 and 1.56.
As such a break must occur before the pound take flight in any clear direction. Traders, however are cautious as everyone is waiting for something concrete to happen. As long as there is no concrete solution to the greece problem, it will be a wait and see situation.
UK has not lost its credit rating problem.
It will be good to trade bounce between 1.57 and 1.56 and prepare for relinguish position is a breakout happens at either 1.55 or 1.57.
Thursday, February 11, 2010
11 Feb 2010
GBP/USD
The movement in Euro affects the pound.
The Euro finished lower as the lack of concrete news regarding the European Union’s plan to guarantee Greece’s debt caused investors to remain nervous and skeptical that a resolution would be reached over the next few days.
The pound hit the 1 hour EMA200 at 1.5765, but gave ground immediately to end the day back in the 1.56 region. Morning trading saw the pound gaining back to the resistance at EMA100 at the 1 hour chart.
Overall, the mood is cautious. Pound has not been able to clear the 1.57 resistance line and the Greece case may result in a big movement down.
Bernanke gave the dollar a boost after hinting that the Fed was gearing to hike interest rates as part of its exit strategy. While most investors have been trying to forecast when the Fed would begin raising the Fed Funds Rate, Bernanke surprised everyone by stating that the Fed may raise the discount rate charged on direct loans to commercial banks. This pressure down the pound during US trading hours.
The daily chart shows a support at 1.555 and a resistance at 1.574, then 1.585.
The movement in Euro affects the pound.
The Euro finished lower as the lack of concrete news regarding the European Union’s plan to guarantee Greece’s debt caused investors to remain nervous and skeptical that a resolution would be reached over the next few days.
The pound hit the 1 hour EMA200 at 1.5765, but gave ground immediately to end the day back in the 1.56 region. Morning trading saw the pound gaining back to the resistance at EMA100 at the 1 hour chart.
Overall, the mood is cautious. Pound has not been able to clear the 1.57 resistance line and the Greece case may result in a big movement down.
Bernanke gave the dollar a boost after hinting that the Fed was gearing to hike interest rates as part of its exit strategy. While most investors have been trying to forecast when the Fed would begin raising the Fed Funds Rate, Bernanke surprised everyone by stating that the Fed may raise the discount rate charged on direct loans to commercial banks. This pressure down the pound during US trading hours.
The daily chart shows a support at 1.555 and a resistance at 1.574, then 1.585.
Wednesday, February 10, 2010
10 Feb 2010
GBP/USD Analysis:
On Monday, the US Dow fell below 10,000 since 2009. It was after some annoucement that Greece will pull through, that gave some hope yesterday to boost it back to a +150 points.
The Euro and the pound also gain as a result.
However, the pound still has a lot of major resistance to clear below we see any bullish movement. The first is 1.574, then 1.586.
The hind side is that pound has already break the 1.57 support line and it is venerable for a break towards 1.54, the next major support.
There are not any major news supporting that the pound can move up. Most likely it will today for some profit taking.
On Monday, the US Dow fell below 10,000 since 2009. It was after some annoucement that Greece will pull through, that gave some hope yesterday to boost it back to a +150 points.
The Euro and the pound also gain as a result.
However, the pound still has a lot of major resistance to clear below we see any bullish movement. The first is 1.574, then 1.586.
The hind side is that pound has already break the 1.57 support line and it is venerable for a break towards 1.54, the next major support.
There are not any major news supporting that the pound can move up. Most likely it will today for some profit taking.
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