Mon, Sep 8 2008, 12:00 GMT
by Benny Menashe
| Long signal | Short signal | |
| Buy a break of resistance level at 1.7975 | Sell a break of support level at 1.7745 | |
| GBP/USD | Buy a break of resistance level at 1.8005 | Sell a break of support level at 1.7540 |
| Buy a bounce at 1.7745 | Sell a failure of breaking the resistance 1.7975 |
The U.K. pound advanced before a government report that may show producer-price inflation held near the highest level in more than two decades, making it less likely the Bank of England will cut interest rates.
The pound snapped a nine-day decline against the dollar before a government report economists forecast will show prices charged by factories in August probably rose 10.2 percent in the year, the same as in July. Bank of England policy makers kept the main rate at 5 percent on Aug. 4 as they seek to balance the risk of a recession with the fastest inflation in more than a decade.
The Sterling may continue its downtrend versus U.S. dollar as we can see strong volatility in the market, based on technical indicators like RSI, which breaks 70% line downwards, MACD crosses the signal line and breaks the equilibrium level, and Bollinger gives us a bearish signal by closing the candle below the higher band.
GBP/USD (Daily Chart)
The primary tendency gives us a clear downtrend.
GBP/USD (Four Hour Chart)
The pair couldn’t break standard error channel upper line.
GBP/USD (Hourly Chart)
The Minor trend had a strong retracement.
Resistance
1.7975
1.8005
Support
1.7745
1.7540
Published on Mon, Sep 8 2008, 12:09 GMT
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