Forex Analysis Pounds to Dollars 1 Sep 2009

Forex Technical Analysis

It is hard to see how the pounds to dollars pair is going to recover from the technically bearish  position in the short term, with all three moving averages now pressing heavily on Sterling , and coupled with the strong support which has now effectively been breached in the last few days, any recovery higher will require a sustained effort and a large dose of US dollar weakness. Yesterday’s candle ended the forex trading session as a small doji, with the low of the day finding some support in the 1.62 price region, in much the same way as towards the end of last week, suggesting that the forex market is trying to rebase at this level. However as outlined above any attempt to move higher will need to breach all three moving averages as well as break and hold above the deep consolidation area, both of which seem unlikely at present. More likely is a re-test of the 1.60 price handle in the short to medium term, which may provide a stronger platform for any reversal higher once again. However, should this level be breached then a deeper move to 1.55 or below would be a possibility in the medium term.

Fundamental Forex Analysis

As we start a new month of fundamental news for Cable, the key data this morning will be the Manufacturing PMI number which is forecast to remain above the ’50′ level, at 51.5 against a previous of 50.8, suggesting once again that we are seeing an industry in expansion rather than one in contraction. As a leading indicator it is one that the forex markets will watch closely, and indeed this picture is likely to replicated later in the US where we have the equivalent data in the afternoon for the US economy, which also shows a similar picture. The other main item of fundamental news in the UK are the Mortgage Approvals, which are expected to show a very small increase once again.  All the other items of news are covered in more detail on the euro vs dollar site or on the economic calendar by following the appropriate link.

You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live currency charts by simply following the links.  I have also included details on an excellent ECN broker.

Forex Market Analysis - Daily Chart GBP/USD 31st August 2009

Forex Technical Analysis

Friday’s candle once again left the daily forex chart for Cable looking weak, ending the forex trading session with a narrow spread down bar, but deep upper shadow as the US dollar bulls forced the British Pound lower in later trading.  The weakness is reinforced by the fact that the high of the day failed to break above any of the three moving averages, which are now adding to the bearish pressure from above. In addition, as the pair have almost breached the deep support level, and seem about to break out below the lower level, this is adding the the general technical weakness on the daily chart. The key for any deeper move is of course the 1.600 price handle and should this be broken in due course, then we may see a re-test of the 1.57 level as a result. The weekly chart also confirms this view with the shooting star candle sitting neatly above the recent price falls, and with last weeks closing price ending below both the 9 week and 14 week moving averages, this again is confirming our forex technical analysis for the pounds to dollars pair.

Fundamental Forex Analysis

Monday is of course a national holiday in the UK, so there is no fundamental news on the economic calendar for today for the British Pound, with the only data in the US being the Chicago PMI, which is expected to confirm that we may now be reaching the end of the recession and bottoming out into the long slow and no doubt painful recovery.

You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live currency charts by simply following the links.  I have also included details on an excellent ECN broker.

Pounds to Dollars Daily Chart 27 Aug 2009

Forex Technical Analysis

Yesterday’s down candle on the daily chart for the pounds to dollars pair, pushed Cable once again closer to the important technical level at the 1.6000 price handle which has really defined the trading level for the forex pair in the last few months. As the markets prepare for Labour Day, the end of the summer holiday period, and the prospect of an increase in trading volumes across all markets once again, this technical price point may once again prove to be pivotal as the fundamental factors combine with the technical picture to produce the medium term price trend. In simple terms, should this level be breached in the next few days or weeks, then this will signal the end to the recent rally, and a possible return of some short term US dollar strength, with the pair falling as a result. However, should this level hold and provide the necessary support, then we may see Cable bounce higher back to retest the 1.70 price region, with a break and hold above signalling further sustained US dollar weakness. Only time will tell and in the short term the outlook is bearish with all three moving averages pointing lower.

Fundamental Forex Analysis

In the UK the Nationwide HIP m/m which came in better than expected at 1.6% and showing that house prices may, once again, be moving upwards.  Later we had the Preliminary Business Investment figures which came in far worse than expected at -10.4% against a forecast of -3.6% and reveals the extent to which capital investment by business fell in Q2 and is an indication of the depths to which the UK economy has fallen.  As a leading indicator and given the extent of the actual from forecast this may prompt the forex market to sell sterling in the short term.  The final item for the UK was the CBI realised sales – a diffusion index based on a survey of retailers and wholesalers which too came in worse than expected at -16 against a forecast of -12, and slightly worse than the previous month.   Meanwhile this afternoon sees the Preliminary GDP figures for the US, unemployment claims, Preliminary GDP Price Index & Natural Gas Storage numbers.  In addition there is also speech from FOMC Member Lacker.  Of this data set it is the first two items which are considered “red flag”.  Preliminary GDP is forecast at -1.4% – slightly worse than previous and the unemployment claims at 562k, a slight improvement from previous.  Given this combination we could have an interesting afternoon trading session with the pounds to dollars pair.

You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live currency charts by simply following the links.  I have also included details on an excellent ECN broker.

Forex Technical Analysis - FX Chart Pound vs Dollar 18th August 2009

Forex Technical Analysis

The pounds to dollars pair continues to mirror the Eurodollar, both of which promised much with the recent breakout from their respective trading ranges only to fail to deliver and promptly reverse.  Yesterday’s  widespread down bar brought the pounds to dollars pair firmly back into the trading range between USD1.60 and USD1.66 and with the 9 day now crossing the 14 day moving average this too is adding to the bearish sentiment.   It is interesting to note that yesterday’s opening price was gapped down from Friday’s close adding further weight to this technical picture.  The extent of this current reversal for the British Pound will depend on a number of factors, including whether equity markets and commodities continue to tumble and forex traders continue to take a dim view of the BOE’s recent decision to expand its QE strategy.

Fundamental Forex Analysis

The fundamental news on the economic calendar for Sterling today centres around the CPI data which is considered by many forex traders as the most important piece of inflation data since it is used by the Bank of England to gauge inflation or deflation in the broader economy.  The forecast for this morning’s number is 1.5%, against a previous of 1.8% representing a further fall to its lowest level in almost 5 years as declines in food prices combined with aggressive summer sales push the number further below the Bank’s target.  At the same time we have the RPI numbers and Core CPI numbers with the first of these expected to come in at -1.7% against a previous of -1.6% and the Core CPI to come in 1.5% against a previous of 1.6%.  Should these numbers come in on target or below expectation then there is little immediate prospect of a rise in interest rates and we could therefore see Sterling come under pressure in this morning’s forex trading session.  Meanwhile in the US forex traders will be watching the PPI for any signs of deflation as well as a clutch of housing data which includes Building Permits (the most significant number this afternoon) to see if the US Housing Market has indeed bottomed.  All of these are covered in more detail on the usd to cad site.

You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live currency charts by simply following the links.  I have also included details on an excellent ECN broker.