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U.S. dollar looking to bounce against sluggish Sterling

Mon, Jan 12 2009, 11:56 GMT
by Benny Menashe

Finotec Group Inc.


Long signalShort signal
Buy a break of resistance level at 1.5155Sell a break of support level at 1.4990
GBP/USDBuy a break of resistance level at 1.5190Sell a break of support level at 1.4905
Buy a bounce at 1.4990Sell a failure of breaking the resistance 1.5155


Fundamental

UK PM Brown said he would announce plans this week to help people who have been unemployed for more than 6 months. Said the government was determined to prevent short-term unemployment leading to long-term unemployment with all its consequences. Guardian newspaper reported that the government was planning to give companies up to GBP 2,500 for new recruits who have been unemployed for more than 6 months. Work and Pensions Secretary James Purnell said government would spend an extra GBP 500 million to fund the initiative.


Technical

The U.K. currency rebound for a short period of time. Technically the market show us a failure swing pattern which is a clear reversal signal and confirming with couple of 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 upper band.

GBP/USD (Daily Chart)

The primary tendency is in a clear downtrend.

Daily Chart

GBP/USD (4 Hour Chart)

The pair breaks the channel lower line.

Hour Chart

GBP/USD (Hourly Chart)

The Minor trend shows us a reversal signal.

Hourly Chart

Resistance
1.5155
1.5190

Support
1.4990
1.4905


Archive

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FINOTEC Trading’s Market Commentaries are provided for informational purposes only. The information contained within these reports is gathered from reputable news sources and not intended as investment advice. FINOTEC Trading assumes no responsibility or liability from gains or losses incurred by the information herein.

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