Monday, December 14, 2009

Dollar is making rally that may roll down by the end of this week

This morning when I was looking at the chart of GBPUSD, this pair made sudden upward move wopping up more than 100 pips in just two hours, at the same time the claims of dollar making a rally looked like fake, but just as traders who have been seeing a downrend in this pair decided to go long the pair broke loose by 100 pips flat. These look like an unexplained move in the market (especially this pair GBPUSD which I follow).
Last week I added that the pair could gain momentum as it had been undervalued but becuase of falling oil prices dollar was firm upward against majors.
Being economic recovery of US is on the way the demand for the crued oil is not going up and at the same time the decision from OPEC to not to cut the supply has drown the price of oil which was once trading at $82 per barrel but now has slide down to $68.

GBPUSD has shown a rangbound market with a support level at 1.6183 and a resistance level at 1.6320, I presume if this can be broken it may give an upward momenton to this pair whcih may cross 1.600 which will be my target.

Well lets see what is coming in this week for GBP and USD which will surely have an impact on this pair:

Tue Dec 15 - UK CPI
CPI always has a major impact on any pair which leads to the interest rate adjustment in the moneotry policy by central bank. This is being forecasted to increase from 1.5% to 1.8%.

Wed Dec 16 - USD - core CPI
Well not so much expected from this as the forecast is the same as last months 0.2%, still an important one.

Thus Dec 17 - USD - Unemployment Claims
Last 474K and forecast 470K
This is one of the major event in this week which cannot be overlooked.

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