{"id":3672,"date":"2009-09-08T11:38:45","date_gmt":"2009-09-08T16:38:45","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=3672"},"modified":"2009-09-08T11:38:45","modified_gmt":"2009-09-08T16:38:45","slug":"gbpusd-charges-higher-amid-broad-dollar-depreciation","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2009\/09\/08\/gbpusd-charges-higher-amid-broad-dollar-depreciation\/","title":{"rendered":"GBP\/USD Charges Higher Amid Broad Dollar Depreciation"},"content":{"rendered":"

By Fast Brokers <\/strong>– The Cable has leapt past our 3rd tier downtrend line, and is trading just above the psychological 1.65 level as we witness a broad-based selloff of the Dollar.\u00a0 We recognize similar, aggressive movements in both the EUR\/USD and USD\/JPY confirming investor distaste for the Greenback.\u00a0 As we explained in today\u2019s EUR\/USD commentary, today\u2019s volatility in the FX market is mostly based on concern that America\u2019s massive injection of liquidity will ultimately result in a large depreciation of the Dollar as investors hedge against potential hyperinflation.\u00a0 We believe the concern is a result of talks at the G20 summit.\u00a0 Meanwhile, it\u2019s widely known that gold has hit the highly psychological $1000\/oz mark again.\u00a0 The recent gold rush is likely a result of the same fear surrounding future inflation.\u00a0 The multiple inflection points of our trend lines in both the GBP\/USD and EUR\/USD turned out to be a reliable sign for future volatility.\u00a0 Investors are sending a resounding technical message regarding their preference for the uptrend following a season of summer doldrums.\u00a0 Meanwhile, volatility should remain high as the week progresses considering we will receive a wealth of economic data from Britain, China, and the U.S. along with a monetary policy decision from the BOE on Thursday.<\/p>\n

Despite today\u2019s positive showing in Britain\u2019s Manufacturing Production number, the GBP\/USD\u2019s gains may be capped from here on out as investors eagerly await Thursday\u2019s BOE monetary policy decision.\u00a0 The BOE has been proactive regarding its alternative liquidity package as policy makers try to stymie the immediate threat of deflation.\u00a0 The BOE could remain in an aggressive monetary stance as they try to limit the Pound\u2019s appreciation by injecting more liquidity so as not to derail the economic recovery taking root.\u00a0 Either way, volatility may not peak until we receive Thursday\u2019s wave of news and data.<\/p>\n

The BOE\u2019s recent injection of liquidity has surely impacted the GBP\/USD.\u00a0 While the EUR\/USD has broken through August highs, the Cable\u2019s August highs remain well out of reach.\u00a0 Therefore, the GBP\/USD has a more complicated path ahead if the currency pair opts to head higher over the near-term as we anticipate.\u00a0 The first technical obstacles to the topside will be the psychological 1.65 level and the lid of the 8\/13-8\/21 trading range.\u00a0 The GBP\/USD should experience more exciting topside movements beyond these barriers.\u00a0 As for the downside, the Cable has intraday lows and our 3rd tier downtrend line to fall back on.<\/p>\n

Present Price: 1.6520<\/p>\n

Resistances: 1.6552, 1.6570, 1.6593, 1.6611, 1.6635<\/p>\n

Supports: 1.6520, 1.6498, 1.6478, 1.6460, 1.6442, 1.6417<\/p>\n

Psychological: 1.65<\/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 has leapt past our 3rd tier downtrend line, and is trading just above the psychological 1.65 level as we witness a broad-based selloff of the Dollar.\u00a0 We recognize similar, aggressive movements in both the EUR\/USD and USD\/JPY confirming investor distaste for the Greenback.\u00a0 As we explained in today\u2019s EUR\/USD … <\/p>\n

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