{"id":6050,"date":"2010-01-20T12:42:28","date_gmt":"2010-01-20T17:42:28","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=6050"},"modified":"2010-01-20T12:42:28","modified_gmt":"2010-01-20T17:42:28","slug":"gbpusd-drops-with-strong-dollar","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/01\/20\/gbpusd-drops-with-strong-dollar\/","title":{"rendered":"GBP\/USD Drops with Strong Dollar"},"content":{"rendered":"

By Fast Brokers<\/strong> – The Cable has pulled back to our 1st tier uptrend line despite the continuation of strong economic data from the UK.\u00a0 CPI came in much hotter than anticipated yesterday, indicating the BoE could have a tough time keeping such a dovish monetary policy stance considering how much weight the central bank places on inflation.\u00a0 However, King tried to downplay the pop in CPI last night and this helped contain the Cable.\u00a0 In addition to yesterday\u2019s strong CPI, today\u2019s CCC number came in much lower than analyst expectations, indicating the UK\u2019s employment picture continues to improve.\u00a0 The recent positive economic data from the UK has yielded an extensive relative strength in the Pound, highlighted by a collapse in the EUR\/GBP.\u00a0 Such optimism concerning the Pound could continue until we see Friday\u2019s Retail Sales number.\u00a0 However, the Euro\u2019s rapid decline and concern regarding China\u2019s tighter monetary policy stance has dragged down the risk trade, bringing the Cable along for the ride.\u00a0 That being said, the Cable has held up relatively well and is still trading above all of our previous trend lines.\u00a0 Meanwhile, attention will shift to the East with China\u2019s GDP and Industrial Production data on deck.\u00a0 It will be very interesting to see how investors react to this data set.\u00a0 China\u2019s recent hawkish monetary policy stance hints that the data will outperform.\u00a0 Although, should China\u2019s economic data come in much stronger than analyst expectations then investors may actually be turned off by the risk trade in the anticipation of even more hawkish liquidity measures from the central bank.\u00a0 Investors will also digest UK CBI Industrial Order Expectations along with U.S. Unemployment Claims and the Philly Manufacturing Index.\u00a0 Hence, volatility could remain at a heightened state for the next 24 hours.<\/p>\n

Technically speaking, as we mentioned the Cable has held up very well considering the plight of the EUR\/USD.\u00a0 The Cable has held strong above our 4th tier uptrend line and still has multiple uptrend lines serving as technical cushions along with 1\/15 and 1\/13 lows.\u00a0 As for the topside, the Cable faces multiple downtrend lines along with 1\/15 and 1\/19 highs.\u00a0 Furthermore, the psychological 1.645 area could prove to be a technical barrier should it be tested.<\/p>\n

Present Price: 1.6275<\/p>\n

Supports: 1.6262, 1.6238, 1.6214, 1.6184, 1.6161, 1.6137<\/p>\n

Resistances: 1.6303, 1.6318, 1.6340, 1.6360, 1.6379, 1.6407<\/p>\n

Psychological: 1.60, 1.65, January highs and lows<\/p>\n

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

Market Commentary<\/strong><\/em> provided by Fast Brokers<\/strong>.<\/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 pulled back to our 1st tier uptrend line despite the continuation of strong economic data from the UK.\u00a0 CPI came in much hotter than anticipated yesterday, indicating the BoE could have a tough time keeping such a dovish monetary policy stance considering how much weight the central bank … <\/p>\n

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