Keep On Eye Out For Recovery On GBP/USD

GBP/USD Today @ 07.27 am (Malaysia):

BUY Area - 1.4327 (My target is 1.4385 Second Target : 1.4450 Third Target : 1.4550)

SELL Area - 1.4283 ( My target is 1.4248. Next : 1.4175 Next 1.4050)

Salam and Hi........

Yesterday my buy area at 1.4243 met and met my target at 1.4336 and stop at 1.4376. Congratulations to those who got it at least 60 pips or more.

Today trading range is still between 1.4100 to 1.4779.

Below is some Tips from Kathy Lien site for your reading that I've copy and paste it here. Maybe this statement may help your trading today.

Until then let see together what will happen on GBP/USD today.

Allah Hu.



Keep an Eye Out for a Recovery :

Although the UK economy still faces many risks in 2009, there is hope. Consumer spending has been pretty resilient with November retail sales rising for the first time in 3 months. If the global economy begins to recover, we expect the UK economy to outperform its peers thanks to the Bank of England’s proactiveness. The currency has sold off significantly, providing additional stimulus for the battered economy. Even if there is no full-blown recovery, the UK economy is much further long in their slowdown than the Eurozone. Therefore if we see sharply weaker growth in the Eurozone economy in 2009, expectations for more aggressive ECB interest rate cuts may be all that the British pound needs to recover against the Euro. As for the US dollar, the recovery could come sooner if the quantitative easing forces the greenback lower. When the UK economy begins to recover, so will its currency.

Technical Outlook for the GBP/USD

The British pound experienced a drastic sell-off throughout the year, tumbling to a level not seen since 2002. The pair lost roughly 5,000 pips as the BOE reduced the interest rates far more aggressively than other central banks. Currently, the pair is well below the 200-week and 50-week Simple Moving Average, reflecting in the change of the trend from an upward to a downward bias. Nevertheless, the pair seems to be oversold for the time being, needing a major retracement if it will continue to depreciate further.

The pair still remains in the sell zone that is established using the Bollinger Bands, and until the price closes above the first standard deviation, it could experience a further downtrend. Although the pair is destined to retrace at some point this year, the price still remains within reach of breaking further, establishing a prolonged downward trend. Near term resistance is at 1.5723, the December high. The currency pair could hold above 1.45, but if it breaks that level, the next meaningful support is not until 1.40, which served as support from 2000 to 2001.