{"id":2363,"date":"2009-06-08T10:19:14","date_gmt":"2009-06-08T15:19:14","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=2363"},"modified":"2009-06-08T10:19:14","modified_gmt":"2009-06-08T15:19:14","slug":"gbpusd-sets-a-temporary-bottom-on-declining-volume","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2009\/06\/08\/gbpusd-sets-a-temporary-bottom-on-declining-volume\/","title":{"rendered":"GBP\/USD Sets a Temporary Bottom on Declining Volume"},"content":{"rendered":"

By Fast Brokers<\/strong> -The Cable is finally forming a temporary bottom after its swift selloff.\u00a0 Friday\u2019s downturn gained traction as Gordon Brown faced the resignation of another top official who asked for Brown\u2019s resignation.\u00a0 The incredible shake up taking place in the Labor Party is unsettling since investors dislike such uncertainty.\u00a0 The Cable managed to drop beneath the psychological 1.60 level in the process, though it is trying to fight back above right now.\u00a0 On an encouraging note, volume continues to tail off with the GBP\/USD\u2019s decline, meaning a near-term bottom is certainly feasible.\u00a0 However, Thursday\u2019s large volume to the downside could prove to be significant, indicating we are witnessing the beginning a new near-term downtrend in both the Cable and the EUR\/USD.\u00a0 In the meantime, if our 1.5777 support doesn\u2019t hold, we could witness another pullback towards the psychological 1.55 level.\u00a0 On the flipside, a near-term pop back above 1.60 and our 3rd tier uptrend line would be a comforting fundamental movement for the bulls.<\/p>\n

Regardless of the near-term downward pressure coupled with political instability, we can\u2019t forget economic data from Britain has been very encouraging over the past six weeks.\u00a0 Britain has outperformed both the U.S. and the EU as far as an economic recovery is concerned, which has given the Pound relative strength.\u00a0 Therefore, the medium-term uptrend in the Cable is alive and well unless the currency pair should make some drastic downward movements.\u00a0 Much progress has been made in the GBP\/USD since January, and it will take several more convincing pullbacks to destroy the medium-term uptrend.\u00a0 Meanwhile, the present pullback in both the Cable and the EUR\/USD is indicating a retracement in the S&P futures due to their positive correlation.\u00a0 Therefore, investors should keep an eye on U.S. equities this week to see if key supports in the S&P can hold.<\/p>\n

Though economic data will be relatively light from Britain this week, we will see Manufacturing Production on Wednesday along with the U.S. Trade Balance.\u00a0 We maintain our negative near-term outlook on the GBP\/USD trend wise due to the meaningful volume accompanying the pullback.<\/p>\n

Fundamentally, we find resistances of 1.5940, 1.6023, 1.6089, 1.6171, and 1.6233.\u00a0 To the downside, we see supports of 1.5863, 1.5777, 1.5703, 1.5629, and 1.5552.\u00a0 The 1.60 level acts as a psychological resistance with 1.55 serving as a psychological cushion.\u00a0 The GBP\/USD is currently exchanging at 1.5907.<\/p>\n

\"\"<\/a><\/p>\n

Market Commentary<\/strong><\/em> provided by Fast Brokers<\/strong><\/span><\/a>.<\/p>\n

Disclaimer:<\/strong> FastBrokers\u2019 market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell\/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.<\/p>\n

Risk Disclosure:<\/strong> There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Fast Brokers -The Cable is finally forming a temporary bottom after its swift selloff.\u00a0 Friday\u2019s downturn gained traction as Gordon Brown faced the resignation of another top official who asked for Brown\u2019s resignation.\u00a0 The incredible shake up taking place in the Labor Party is unsettling since investors dislike such uncertainty.\u00a0 The Cable managed to … <\/p>\n

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