What's up with GBP/USD? is it the end of the pound's recent rally? Will the pair now test new historical lows? Questions, quesitons.....
Unfortunatly much like my car my crystal ball is in need of a service and to make matters worse I have had 660mls of Chang. It's Sunday, the sabbath and there really isnt much point in trading the markets today so I have been easily dragged away from my PC by my 18 month son when he requests for ''swim, swim''. The sun was shining very brightly today and the intense mid summer mid-day Thai sunshine required me to put a umbrella over the pool so we could cool down but still enjoy some shade.
There are some typos which you will have to endue because this is just a little hello from the LOS to say go out be with your family and enjoy life..because tomorrow bright and early the markets will be back to life.
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Sunday, August 23, 2009
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Wednesday, August 5, 2009
Forex News
EurUsd Consolidation is the name of the game for a day or two in anticiption of Friday's Non-Farm Payroll numbers. EUR USD has found resistance at the trend channel at 1.4430 / 45 and somehow picked up support from a one off high back in December 08 at 1.4379. The prior breakout level at 1.4338 still remains as the major support level and 1.4291 just below there but for intraday players there is a nice range between 1.4379 and 1.4430 / 45 that should provide some easy pickings for 50 pips or so until the ADP number this afternoon.
GbpUsd Looking again at the longer term picture it is easy to see why 1.7029 is such a big hurdle to clear and at the same time why it was so easy to get there after clearing 1.6663. There is huge RSI divergence on the daily chart suggesting that the move was completely stop related and the pair looks like it is unlikely to catch a strong bid until it retests the break out level back down at 1.6663. The sweet spot for the medium term bulls is all the way back down at 1.6272 and for the shorts 1.7029 is looking attractive with the short sweet spot at 1.7309 which, as mentioned before, is a 50% retracement of the entire 2 year down move and the last of the 2 year downtrend channels. Intraday traders expected to play yesterdays range between 1.6890 and 1.7005.
UsdJpy The pair is getting a little congested now between the 4 week uptrend and the 2 year downtrend channel. The long entry level highlighted yesterday at 94.44 was followed by a swift move to 95.42, just slightly above the resistance at 95.29 but still not making a new high against the earlier move in the Far East overnight (95.46). Long buying now anticipated at 94.78 but upside remains capped until we break that high from yesterday so expect intraday trading between the two levels, 94.78 and 95.30 / 45.
UsdChf Typical of USD CHF, range bound action is back in play with intraday buyers of the pair (and potentially the SNB) at 1.0578 and the prior breakdown level at 1.0632 still providing good supply, building a short term resistance level. Only a move back above 1.0654 could give the USD bulls any hope of getting back into the old ranges. To the downside a move below yesterdays low at 1.0563 and the 2008 closing low at 1.0556 could be very costly for the SNB and those riding their coat tails but the support is extremely significant. If it does go then the next major level is 1.0325. Intraday, expect 50 or 60 pips rangebound action between 1.0573 and 1.0632
Forex News provided by AC Markets
GbpUsd Looking again at the longer term picture it is easy to see why 1.7029 is such a big hurdle to clear and at the same time why it was so easy to get there after clearing 1.6663. There is huge RSI divergence on the daily chart suggesting that the move was completely stop related and the pair looks like it is unlikely to catch a strong bid until it retests the break out level back down at 1.6663. The sweet spot for the medium term bulls is all the way back down at 1.6272 and for the shorts 1.7029 is looking attractive with the short sweet spot at 1.7309 which, as mentioned before, is a 50% retracement of the entire 2 year down move and the last of the 2 year downtrend channels. Intraday traders expected to play yesterdays range between 1.6890 and 1.7005.
UsdJpy The pair is getting a little congested now between the 4 week uptrend and the 2 year downtrend channel. The long entry level highlighted yesterday at 94.44 was followed by a swift move to 95.42, just slightly above the resistance at 95.29 but still not making a new high against the earlier move in the Far East overnight (95.46). Long buying now anticipated at 94.78 but upside remains capped until we break that high from yesterday so expect intraday trading between the two levels, 94.78 and 95.30 / 45.
UsdChf Typical of USD CHF, range bound action is back in play with intraday buyers of the pair (and potentially the SNB) at 1.0578 and the prior breakdown level at 1.0632 still providing good supply, building a short term resistance level. Only a move back above 1.0654 could give the USD bulls any hope of getting back into the old ranges. To the downside a move below yesterdays low at 1.0563 and the 2008 closing low at 1.0556 could be very costly for the SNB and those riding their coat tails but the support is extremely significant. If it does go then the next major level is 1.0325. Intraday, expect 50 or 60 pips rangebound action between 1.0573 and 1.0632
Forex News provided by AC Markets
Forcasted Central Bank Rate Decision
| Date / GMT | ACM | Consensus | Current Rate | |||||
| 6th/11:00 | European Central Bank Rate Decision | 1.00% | 1.00% | 1.00% | ||||
| A wide majority of the market expects the ECB to remain at the current level of 1.00%, but a growing consensus is beginning to suspect the central bank may forced to cut rates 25bps. Commentary released by IMF highlight critical economic challenges for the Eurozone region. In the executive summary of IMF publication released last week, they make a cautionary statement: “while the Eurozone facing strong disinflationary pressures, monetary policy will need to remain supportive…the benefits of further cuts in the policy rate need to be weighed against their possible adverse impact on the functioning of money markets but any potential margin for further reductions out to be utilized as soon as possible.” ECB President Trichet has been reluctant to establish a hard floor of 1.00% as of recent, which is probably due to the appreciation in the Euro hindering export driven growth. The sharp decline of GDP to -2.5 reflects the severity of economic conditions in the Eurozone. In addition to the growth compenent, the interest rate market remains far too delicate to absorb any rate hikes in the near-term as yields begin to pose some degree of relative value for investors looking to migrate out of risk-averse positions. | ||||||||
| 6th/11:00 | Bank of England Rate Decision | 0.50% | 0.50% | 0.50% | ||||
| The BoE is expected to hold rates steady at 0.50% which is line with market forecasts. It is most likely the central bank will adopt a "wait and see" approach following the aggressive measures taken in the form of asset purchases over the last several months. A key indicator suggesting that any additional quantitative easing would occur on a much more conservative scale is the 150bln Sterling quota for gilt purchases which has not been met. Fulfilling the quota for gilt purchases will probably happen before any additional monetary policy action will be announced and this is supportive of the Gbp. The UK economy remains under pressure with rising unemployment at 7.6% vs. 7.4% estimated. Other leading indicators such as a negative GDP of -0.8% and industrial production at -11.9% pose significant challenges for UK policymakers and the deployment of further quantitative easing may prove detrimental to the long-term outlook in region. Source: Ac Markets | ||||||||
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