GBP/USD:
The Greenback continues to rally and we are approaching pivotal handles across the G-10. The GBP has been range bound since the end of May, so much so, that it is the worst performing currency against the Dollar amongst the G-10 since May 25th. Currently the 100 day MA is sitting above the 50 day MA which is indicative of a falling price environment.
The Pound is currently trading at 1.6276 and the 50 SMA is sitting at 1.6404. A close below the 50 SMA generates a strong Short entry signal. In addition, using the Fibonacci Retrace from the Cable’s low on March 11th at 1.3657 to the Cable’s high at 1.7043 on August 5th brings to the forefront some important levels.
INSERT CHART A
The 23.6% Retrace level sits at 1.6244 just 30 pips from the current mark. The close today likely below the 50 SMA coupled with a breach of the 23.6% level may send the GBP free falling to the next Fibo level of 38.2% or 1.5749.
There are a number of trading indicators that are used for ranging markets versus trending markets. The MACD is a common and important tool for traders as it more easily identifies momentum and changes thereto. In the Chart below the red vertical line highlights the crossover of the Average versus the MACD, representing a shift in momentum.
INSERT CHART B
Another indicative technical pattern we use are lower lows, lower highs and vice versa. As you see on the chart above we have been trending down within the range. More importantly we have reached a succession of lower high and lower lows. The more the pattern repeats itself the greater the confirmation of the move and the more likely it is to continue.
The combination of MA’s, Fibonacci’s, MACD, and technical patterns identifies potential entry points, momentum, and profit targets.
Gold Continues Sell-off by GoLearn Forex
Global Equity Markets slumped on Tuesday as a wave of poor economic news and lowered rating caught the market off guard. In Japan, GDP printed less than forecasted, coming in at 1.3%. Fitch lowered its rating on Greece. In Dubai, the main developer reported a $3.65 billion loss contributing to the market’s woes. The DJIA finished the session down 104.14 points to close at 10,287.97
The Dollar continued its rally feeding off the poor equity performance as risk aversion remained in firm control. The DXY closed at 76.31, a level not seen since early November. Gold continued its selloff as it closed the day down $30 to 1,128.40. Oil was not far behind finishing the day down $1.31 to 72.62 a barrel.
The BOC left rates unchanged at .25. In Switzerland, Unemployment printed as expected for November at 4.2%. Later today the RBZ will announce its Interest Rate decision. They are widely expected to keep rates on hold, currently at 2.5%. With no relief insight we expect the dollar rally to continue in to today.
Upcoming Forex Events for December 9, 2009
CHF Unemployment Rate Actual 4.10% Forecast 4.20% Previous 4.10%
EUR German CPI (MoM) Actual -0.10% Forecast -0.20% Previous -0.20%
NZD Interest Rate Decision Forecast 2.50% Previous 2.50%
AUD Employment Change Forecast 6.00K Previous 24.50K
Analysis by http://www.golearnforex.net
