Friday, July 23, 2010

Friday - UK GDP and sterling

I am looking at sterling because UK prelim GDP is at 08:30GMT
Hard to call this one either way but its summer and Friday.  Could be monster chop followed by a euphoria rally after the EU bank stress test results later today.

Sterling index has formed a big head and shoulders on the daily.  I hate the pattern but it does show key support.

Cable is bullish, broke the descending trendline from the 09 highs, is in a rising channel and bouncing under the 200 day moving average.  If the GDP number is bad key support is at 1.51 and a break below that targets a deeper correction to 1.48.  If the bottom of the channel holds as support I am a buyer of dips targeting 1.56 & 1.61

I am bullish, looking for this break of trendline resistance to hold and targeting 0.86 then 0.8730-50

Weekly charts shows sitting on key support at 1.5800 and a break of this support and there is no real support until 1.5100.  However the daily chart looks to have double bottomed and good news makes this a buy with a fib target of 1.66

This pair moves inversely with risk.  I sold it because it broke trendline support today when the S&P broke trendline resistance.  Trend here looks to be down but I am cautious because the weekly chart still shows an uptrend.  A summer rally in stocks could send this back to the lows at 1.62

Daily chart is choppy and sideways, rangebound between 131 and 1.36.  I am short and looking for a break of 1.31 but I am watching USDJPY for direction.  I favour the downside but its hard to reconcile with a summer rally in stock so more range trading perhaps.

Rangebound and sideways, possible double top needs to break 1.5450 to confirm and if it does sets up 1.48 and another test of the lows.  A lower high and support here, followed by a break above 1.62 has a fibonacci target of 1.7050

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