Mon, Oct 6 2008, 12:11 GMT
by Benny Menashe
| Long signal | Short signal | |
| Buy a break of resistance level at 1.7875 | Sell a break of support level at 1.7550 | |
| GBP/USD | Buy a break of resistance level at 1.7960 | Sell a break of support level at 1.7450 |
| Buy a bounce at 1.7550 | Sell a failure of breaking the resistance 1.7875 |
The pound fell against the dollar amid speculation the Bank of England will cut interest rates this week to bolster an economy that may be in a recession. The British currency also rose to the highest level in seven months against the euro after BNP Paribas SA agreed to take control of Fortis in Belgium and Luxembourg for 14.5 billion euros ($19.7 billion) and the German government, banks and insurers agreed on a 50 billion-euro rescue for Hypo Real Estate Holding AG after an earlier bailout faltered.
The U.K. currency declined to 1.7587 and we can see the drop of 4 percent. Technically the market trend is still clear downtrend as we can see strong supply in the market, based on technical indicators like RSI, which is in a bearish direction, MACD crosses the signal line and is pointing downwards, and Bollinger gives us a selling signal by closing the candle below the middle band.
GBP/USD (Daily Chart)
The primary tendency is in a clear downtrend.
GBP/USD (4 Hour Chart)
The pair fails to break the channel upper line.
GBP/USD (Hourly Chart)
The Minor trend shows us a break of the support level.
Resistance
1.7875
1.7960
Support
1.7550
1.7450
Published on Mon, Oct 6 2008, 12:17 GMT
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