{"id":2497,"date":"2009-06-16T07:36:47","date_gmt":"2009-06-16T12:36:47","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=2497"},"modified":"2009-06-16T07:36:47","modified_gmt":"2009-06-16T12:36:47","slug":"gbpusd-deflects-off-our-3rd-tier-trend-lines-2","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2009\/06\/16\/gbpusd-deflects-off-our-3rd-tier-trend-lines-2\/","title":{"rendered":"GBP\/USD Deflects Off our 3rd Tier Trend Lines"},"content":{"rendered":"

By Fast Brokers<\/strong> – The Cable pulled back on large volume yesterday as the Dollar appreciated across the board.\u00a0 However, the GBP\/USD\u2019s losses were not technically significant as with the EUR\/USD due to Britain\u2019s relative strength economically.\u00a0 The Cable now appears to be following our 2nd tier downtrend line while trading comfortably above the psychological 1.60 level.\u00a0 Additionally, the GBP\/USD is well above June lows whereas the EUR\/USD closed beneath their respective June lows yesterday.\u00a0 The relative strength of the Pound is further exemplified by the overall outperformance of the GBP\/JPY and underperformance of the EUR\/GBP.\u00a0 Investors are rewarding the Pound for Britain\u2019s strong showing in economic data while it seems that the BOE has taken the more appropriate measures to fight the crisis as compared to the Fed and ECB.\u00a0 Investors will get a better sense of how the British economy is faring in less than an hour upon the release of the nation\u2019s year-over-year CPI and RPI data.\u00a0 Additionally, investors will digest important pricing data from both the EU and U.S.\u00a0 If the numbers signify deflation, we could witness further near-term strength in the Dollar.<\/p>\n

Despite the relative outperformance of the Pound, the Cable is still facing some considerable downward pressure due to the currency pair\u2019s positive correlation with U.S. equities.\u00a0 The S&P futures are indicating there may be further room to go to the downside.\u00a0 Investors are concerned that international governments will not continue to support America\u2019s expanding burden of debt.\u00a0 Furthermore, U.S. equities may be overvalued due to their impressive run in the first half of 2009.\u00a0 The challenge for the Cable to the upside is presented in the form of our 2nd and 3rd tier downtrend lines.\u00a0 While we could see a bounce today in the face of oversold conditions, the Cable may be forced to participate in the near-term downtrend we\u2019ve forecasted in the EUR\/USD, USD\/JPY, and S&P futures.\u00a0 Ultimately, as with other major Dollar pairs, the medium-term fate of the GBP\/USD relies upon the ability of the global economy to follow through on its path to recovery.\u00a0 Any broad-scale pull back in the global economy, or a retraction into the problems we saw in 2008 would likely kick the Cable back into its medium-term downtrend.\u00a0 However, we have no reason to suspect this and the medium-term uptrend line remains intact.<\/p>\n

Meanwhile, our 3rd tier uptrend line is playing an important role as far as support is concerned.\u00a0 If our 3rd tier doesn\u2019t hold, we could witness a sharp near-term contraction towards our 2nd tier uptrend line and the psychological 1.60 level.\u00a0 The rising volume yesterday to the downside is certainly a cause for concern and could be foreboding of an oncoming pullback.\u00a0 As for the upside, the Cable will need to get above our 2nd and 3rd tier uptrend lines to have a chance at overcoming previous June highs.\u00a0 We maintain our negative outlook for the short-term in the GBP\/USD trend-wise due to the negative pressures in the global market place.<\/p>\n

Present Price: 1.6335<\/p>\n

Resistances: 1.6371, 1.6412, 1.6498, 1.6574, 1.6620<\/p>\n

Supports: 1.6315, 1.6263, 1.6210, 1.6141, 1.6080<\/p>\n

Psychological: 1.65, 1.60
\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 pulled back on large volume yesterday as the Dollar appreciated across the board.\u00a0 However, the GBP\/USD\u2019s losses were not technically significant as with the EUR\/USD due to Britain\u2019s relative strength economically.\u00a0 The Cable now appears to be following our 2nd tier downtrend line while trading comfortably above the psychological … <\/p>\n

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