GBP/USD is trading in wide and wild range in the last few weeks. The trend is still down but the market is in consolidation mode. MACD and Stochastics are about to give sell signals. BoE speakers sound dovish and want the cable lower. Support is @ 1.9880 and 1.9720. If t6he latter level is broken we can see a test of 1.9335. Resistance is @ 2.0190 and 2.0270.
Two days relatively calm market after two days of 250 pips ranges. The trend is still up but the speculators are aware of CBs joint intervention. Technical indicators are pointing higher but the Stochastichs is sending some warning signs. Probably the pain threshold is 1.60+. Don’t leave long EUR positions without stop. Support is @ 1.5725 and 1.5660. Resistance is @ 1.5858 and 1.5905.
The forex market is crazy these days. Don’t use any kind of analysis, it won’t help. It’s much better to stay aside until the ECB realizes what exactly happens. Large speculators and CBs from Mid East Asia and Russia are making money. Yesterday they launched another attempt towards 1.6000 to test the patience of teh G10 countries Central banks. In the next few weeks we’ll who will win this games.
After rumours about UK bank problems GBP was sold off agressively. The chart looks heavy and if GBP/USD breaks below 1.9940 the next support @ 1.9740 is next target.
FED cuts rates with 75 bps. In the statement again were mentioned the downside risks to growth and we can expect further easing. Some analysts expect Fed funds rate at 1%. The reaction of the forex market was choppy after the announcement. EUR/USD is extremely overbought and is due for correction but at the same time the dollar sentiment is as bearish as it can be. Watch the support @ 1.5675 (5 day MA and yesterday’s low). If it is broken a shooting star reversal pattern will be confirmed and correction towards 1.5490 is expected. While the market is above the support level the next target is 1.5902 and then 1.6000.
The forex market is in panic mode. The problems in the credit market worsened in the last few days and the purchase of Bear Stearns by JP Morgan for $2 per share caused massive sell off in many markets. EUR/USD reached 1.5902 but then retreated to 1.5700/800 area. Dealers are expecting joint intervention by the central banks. The forex market is very volatile and 1-month options volatilities jumped form 10.60 to 12.90. EURO is extremely overbought and today’s price action could form a shooting star reversals pattern. We should wait until the next few days to see if it is confirmed. Tomorrow market participants will wait for the FED’s decision and some bets are for 100 bp cut. Be very cautious and don’t leave EUR longs without stop.
GBP/USD formed bearish engulfing on Friday which is a candlesticks reversal pattern. Today the market broke below the Friday’s low and confirmed the reversal. If the support @ 1.9970 is broken the next support is @ 1.9720. Keep in mind the the forex market is crazy these days and anything is possible.
GBP/USD is between strong support and resistance zones. Upside is limited by the recent highs @ 2.0220 and the 50% retracement level @ 2.0240. The downtrend will continue if the support levels 1.9990 (recent lows) and 1.9970 (previous resistnace now support) are broken.
Yesterday the forex market was extremely volatile. After the stronger than expected ZEW index EUR hit another all-time high @ 1.5494. In the early US trading Fed announced further attempts to enhance liquidity via an expanded securities lending program and increased to its swap lines with the ECB and SNB. This signalled massive sell off in the EUR/USD pair and rally in stocks. The daily candlesticks chart looks top heavy with haramii and hanging man reversal patterns. Sotchastics oscilator is giving sell signal also and if in the next few days support @ 1.5280 is broke a correction towards 1.5140 is possible.
GBP/USD is still in its downtrend although the cable looks stronger now after the joining the euro. Key for the GBP future trend will be the 2.0250 resistance (50% retracement level and previous support) and the BoE monetary policy. Remember that BoE is not like ECB and will act immediately if the economic data from UK deteriorate further.
