|
Pounds-Dollar - exchange rate: 1.5727 (Sunday, January 29, 2011).
GBPUSD Trend: Upward correction during downtrend.
GBPUSD Outlook: Some more upward correction/sideways move before another fall.
Please refer daily currency charts and not short-term charts e.g. hourly Forex charts.
Pound-Dollars (GBPUSD) -Recent Economic Releases:
• UK: Public Sector Net Borrowing: 10.791B Pounds, positive as compared to the forecast (Pounds 12.2B) as well as the previous release (GBP 15.085).
• UK: BBA Mortgage Approvals: 36.2K, positive as compared to the forecasts (35.3K) as well as the previous (34.7K).
• UK: GDP (QoQ) -prelim: -0.2%, negative as compared to the forecast (-0.1%) as well as the previous (0.6%).
• UK: GDP (YoY) -prelim: 0.8%, same as the forecasts but better than the previous 0.5%.
• US: Durable Goods Orders: 3.0%, positive as compared to the forecasts of 2.0% but less than the previous 4.3%.
• US: Jobless Claims: Initial claims 377K were negative as compared to the forecast (374K) as well as the previous 356K. Continuing claims 3.554M were also poor against the forecasts of 3.50M and previous 3.466M.
• US: Leading Indicators (MoM): 0.4%, negative as compared to the forecast of 0.7% but quite better than the previous 0.2%.
• US: New Home Sales (MoM): 0.307M, negative as compared to the forecasts (0.320M) as well as the previous release (0.314M).
• US: GDP Annualized -prelim: 2.8%, less than the forecasts of 3.0% but quite better than the previous 1.8%.
• US: GDP Price Index -prelim: 0.4%, quite negative as compared to the forecast (2.0%) as well as the previous release (2.6%).
• US: Real Personal Consumption Expenditures (QoQ): 1.1%, negative as compared to the forecasts (2.3%) as well as the previous release (2.1%).
• US: Reuters/Michigan Consumer Sentiment Index: 75.0, positive as compared to the forecast (73.9) as well as the previous release (69.9).
Pounds-Dollars (GBPUSD)-Technicals Trend Analysis:
1. MACD: GBPUSD daily MACD line remains over the signal line with a wide and convincing gap. 4-hourly MACD is over the signal line but with a very narrow gap and has started running flat.
2. ADX:After a couple of fast crossovers, GBPUSD daily +DI line had crossed over -DI line rather convincingly. The gap was widening but has narrowed down a bit. ADX is well below 25 but started rising very slowly (approx 15.20). A no trend situation.
3. Ichimoku Cloud: Tenkan-Sen crossed over Kijun-sen to give a weak bullish signal (you may please check our Ichimoku cloud page under technical analysis). The upward move broke over the resistance of first the lower edge of the cloud and the upper edge also and quite strongly. GBPUSD has been finding support at Tenkan-Sen level since January 17th. Please check GBPUSD daily Ichimoku chart.
Pound-US Dollar (GBP USD) - Forecast /Outlook:
Previous forecast of GBPUSD:
“The price action of the last week indicates that we should see some more upward move if the resistance near 1.5630 gets broken. Even above 1.5620 we would expect frequent resistances near 1.5670 and 1.5700. A break over 1.5700 should bring further upward move towards strong resistance near 1.5780. Above 1.5700 our short-term outlook will become more neutral but we will expect convincing short-term reversal of the short-term downtrend only with a break over 1.5785.”
This week:
The Pounds-Dollar pair broke the resistance of 1.5630 and then moved as high as 1.5741 as mentioned during last weekend and quoted above. The currency pair closed for the week strongly at 1.5728.
The price action of the last week and the strong closing suggests that we can expect some more upward gains. But please note that GBPUSD is approaching a strong resistance zone and need to be carefully watched. The peak of this resistance zone is 1.5779 which has not been broken since end of November, 2011. For any convincing upward moves we need to wait for a break of 1.5779/1.5785. A break of this should take the GBPUSD towards the resistance of 1.5880 and above that towards the psychological resistance of 1.6000.
While mentioning the above, please note that we are considering this upward move just as correction and expect a fall from one of the mentioned resistance levels. There is no change on our overall bearish outlook as yet and that will only change with any firm break first over 1.6000 and then finally over 1.6165.
On the down side a break below 1.5516 will turn our focus back towards downside towards first 1.5400 support and then to retest the recent 1.5279 and then 1.5233. A firm break below this and the minor support of 1.5220 should take the GBPUSD towards 1.5160. The psychological support of the approaching 1.5000 ranges should gain strength from this level. Strategies for Trading GBPUSD (British Pound-Dollar):
A mentioned above that our mid-term outlook for GBPUSD bearish is but initially some more upward correction is expected. Our initial positions will be on buy side considering the resistance and supports mentioned but for that we will wait for a firm break over 1.5779. A failure of that well make us go short for this currency pair.
(Please join the News Letter or Register to get email alerts when Forex analysis for GBP/USD is updated)
For short term Forex trades, please refer to daily Technical analysis for British Pounds-US Dollars at GBP/USD daily analysis.
You may also share and check any real-time trading positions of British Pounds-Dollar in the Forum and the current GBPUSD market sentiments.
Pound-Dollar Interest rate Comparision
(For Carry Trades) |
0.50% |
0.25% |
0.25% |
|
