GBP/USD

Speculation in the futures market that the pound will fall against the dollar increased in the last two weeks, with so- called net short positions rising to 34,462 on April 7 from 30,746 March 24, according to data from the Washington-based Commodity Futures Trading Commission.

The pound will fall to $1.45 and to 91 pence versus the euro by the end of the second quarter, according to the median estimates in Bloomberg surveys of at least 35 analysts.

Betting on pound gains is “definitely not a crowded trade,” said David Woo, global head of foreign-exchange strategy in London at Barclays Plc, who predicts the currency will strengthen to 80 pence per euro this year. “If you look at the data from the CFTC, the market still doesn’t have the position on sterling.”

Technical analysts, who use historic trading patters to predict future prices, suggest the pound will continue to advance. The currency has been trading above its 100-day moving average against the euro since April 7, the first time it broke through that level since Nov. 3, according to data compiled by Bloomberg.

Breaking Levels

“Euro-sterling has rammed through all of the technical levels,” said David Powell, a currency strategist in London at Merrill Lynch & Co. “Support was created by the 100-day moving average, but we’ve just gone right through there.”

Fibonacci charts show the pound may struggle to hold its gains unless it surpasses $1.5074. It almost reached that level three times since falling to a low of $1.3503 on Jan. 23.

Britain’s economy will shrink less than the U.S. and Europe this year, the Organization for Economic Cooperation and Development said on March 31. The U.K. will contract 3.7 percent, compared with 4.1 percent in the 16-nation euro-region and 4 percent in America, the Paris-based OECD said.

Brown’s government plans to sell at least 147.9 billion pounds ($195 billion) of debt in the fiscal year ending March 2010 to revive the economy, Europe’s second-largest. It sold an unprecedented 146.4 billion pounds of securities last year. The sales are helping finance a 25.6 billion-pound program of tax cuts and spending increases over the next two years. Brown has pledged 40 billion pounds to recapitalize banks and hundreds of billions of pounds in loan guarantees.

‘The Right Measures’

“On the financial sector, he’s put in place the right measures before any other country,” said Nick Kounis, an economist at Fortis Bank NV in Amsterdam and a former U.K. Treasury official. “Where he doesn’t rate highly is fiscal policy. The U.K. was in a very bad state when it entered the recession with a large deficit.”

Britain will have a deficit of 9.5 percent of gross domestic product in 2009, the most in the Group of Seven, according to the International Monetary Fund. The Washington- based lender forecast shortfalls of 7.7 percent in the U.S., 8.1 percent in Japan and 4 percent in Germany, according to estimates last month.

“History will reveal 2009/2010 as the time to buy cheap,” Neil Jones, the head of European hedge fund sales at Mizuho Corporate Bank in London said in a note yesterday. “We will look back on this era and say, ‘I should have loaded up on property, companies and stocks.’”

To contact the reporters on this story: Matthew Brown in London at

GBP/USD @ 10.45 am (Malaysia)

BUY Area - 1.4971 (First Target : 1.5082 Next : 1.5167)

SELL Area - 1.4931 (First Target : 1.4866)

Salam and Hi........

Today Trading range is between 1.4800 to 1.5300 area.

As aspected yesterday candle broke my second target at 1.5050. Congratulations who took this opportunity and I've heard one of you got more $4000.

Today please see the Daily and weekly chart. Looks like the candle may move further up. Please be alert on all Bullish signal like small and big flag, continuations bullish candle, inverted hammer. So do the Bearish signal like ,abandoned baby, dark cloud, pennant and etc.

Until then let learn something new today and be more discipline and the most important is set your target.

Allah Hu.

GBP/USD @ 09.45 am (Malaysia)

BUY Area - 1.4911 (My target is 1.4957. Next 1.5050)

SELL Area - 1.4871 (My target is 1.4800. Next 1.4778)

Salam and hi..........

Trading Range is between 1.4600 to 1.5000.

Allah Hu.

GBP/USD @ 08.05 am (Malaysia)

BUY Area : 1.4775 (First target : 1.4870 Next : 1.4952)

SELL Area : 1.4755 (First target : 1.4650)

Salam and Hi..........

Trading Range is between 1.4600 to 1.4945.

If break Resistance at 1.4957, candle may test 1.5100 area. If fail candle may drop back to 1.4775 area. Let see this happen.



Allah Hu.

GBP/USD @ 10.45 am (Malaysia)

BUY Area - 1.4667 (My target: 1.4700 Next : 1.4778)

SELL Area - 1.4625 (My target : 1.4584 Next : 1.4500)

Salam and Hi...

Trading range is between 1.4584 to 1.4778.

At this moment the market is still on consolidations mood from 1.4957 drop. Initial resistance is at 1.4778 and as long as this price holds candle may drop deeper at 1.4400 area. The market is still slow because of the Bank Holiday.

Allah Hu.

From Bloomberg

Dollar Gains Most in 2 Months on Optimism Worst of Crisis Over
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By Ron Harui and Lukanyo Mnyanda

April 11 (Bloomberg) -- The dollar posted the biggest weekly gain versus the euro in more than two months on optimism the worst of the financial crisis in the U.S. is over.

The Dollar Index, which tracks the greenback against the currencies of six of its biggest trading partners, completed the largest weekly advance since November after Wells Fargo & Co.’s profit beat estimates, triggering the steepest one-day gain on record in the Standard & Poor’s 500 Banks Index. The euro dropped the most against the yen since January on concern the European Central Bank will cut its benchmark interest rate to below 1 percent to spur growth.

“Wells Fargo’s results augur well for U.S. banks’ earnings and point to an easing in the financial crisis,” said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd., Japan’s largest currency broker. “The dollar is likely to be bought.”

The dollar climbed 2.3 percent this week to $1.3143 per euro on April 10, the biggest gain since the five days through Jan. 23. It touched $1.3090 yesterday, the strongest level since March 18. The greenback strengthened 1.1 percent to $1.4672 per pound and advanced 0.6 percent to 1,333 South Korean won.

The yen appreciated 2.3 percent to 132.18 per euro, the biggest gain since the week to Jan. 23. It was little changed against the dollar at 100.24 yen from 100.31 on April 3.

Dollar Index

The Dollar Index, which the ICE uses to track the greenback against the euro, yen, pound, Canadian dollar, Swiss franc and Swedish krona, gained 1.9 percent this week to 85.786, the most since the five days through Nov. 21. The ICE was closed yesterday for Easter.

The U.S. currency advanced after Wells Fargo, the second- largest U.S. home lender, said on April 9 that first-quarter net income surged 50 percent because of “strong” revenue from Wachovia Corp., which it acquired last year.

Goldman Sachs Group Inc. will release its first-quarter results on April 14. The New York-based company is considering a multibillion dollar share sale to help repay a $10 billion government loan, the Wall Street Journal reported yesterday, citing people familiar with the matter.

U.S. Treasury yields this week climbed to near the highest since the Federal Reserve started buying debt as the economy showed signs of improving and the U.S. sold $59 billion in debt. The 10-year yield rose three basis points, or 0.03 percentage point, to 2.93 percent, according to Bloomberg data.

Rate Cut

The euro touched a three-week low against the dollar yesterday on concern the ECB will lower its benchmark rate for a fourth time this year at its meeting next month.

ECB council member Nout Wellink said the central bank can make additional cuts to its 1.25 percent rate and is considering other measures to spur lending and boost the economy.

“There is some room for lowering the interest rate,” Wellink, who also heads the Dutch central bank, said April 9 in an interview in Leiden, the Netherlands. “There is also room for other measures, on which we will decide soon,” he said, declining to specify what action the bank might take.

Fellow member Ewald Nowotny said cutting the rate below 1 percent was still open for debate and it would be “sensible” for the bank to buy corporate debt as it fights for an economic recovery.

“There seems to be a growing consensus for more rate reductions” from the ECB, said Akifumi Uchida, deputy general manager of the marketing unit in Tokyo at Sumitomo Trust & Banking Co., Japan’s fifth-largest bank. “The euro will probably weaken.”

Room to Lower

Investors raised bets the ECB will lower borrowing costs at its May 7 meeting. The yield on the three-month Euribor interest-rate futures contract for May delivery fell to 1.31 percent on April 9 from 1.39 percent at the end of last week, according to data compiled by Bloomberg.

The euro may extend its decline to $1.25 after dropping below a March 30 low of $1.3114, Sumitomo Trust’s Uchida said.

The $1.3114 level represents so-called support on a horizontal trend line of a descending triangle, he said. The trend line connects the March 30 low and the April 9 low, based on data compiled by Bloomberg. A descending triangle consists of horizontal and descending trend lines.

‘Buying Opportunity’

Investors should use a decline in the euro as an opportunity to buy the common European currency, according to BNP Paribas SA. The euro may fall to $1.30 over the next week, analysts led by Hans-Guenter Redeker, the London-based global head of currency strategy, wrote in a note yesterday.

“Any such pullback would be viewed a medium-term buying opportunity,” they said.

The yen rose for a fourth day versus the euro yesterday as Asian stocks pared an earlier advance, prompting some investors to reduce their holdings of higher-yielding assets.

The Nikkei 225 Stock Average trimmed its gains to 0.5 percent after earlier rising as much as 1.7 percent. The MSCI Asia-Pacific Index of regional shares gained 0.6 percent following an earlier 1 percent increase.

“The Japanese stock market isn’t reacting as positively as the U.S.’s,” said Ryohei Muramatsu, Tokyo-based manager of Group Treasury Asia at Commerzbank AG, Germany’s second-biggest lender. “The pullback in equities here is leading to some buying of the yen.”

To contact the reporters on this story: Ron Harui in Singapore at rharui@bloomberg.net; Lukanyo Mnyanda in London at lmnyanda@bloomberg.net.

Last Updated: April 11, 2009 01:54 EDT

Statement From fx360 For GBP/USD

BOE MEETING MAY BECOME A NON-EVENT FOR FOREX MARKETS

The pound is well contained in today’s trading showing only a slight move to the upside. It does not appear to just be the holiday weekend that is keeping GBP/USD motionless, as weekly price action has been hesitant to show any clear direction. As a better indication of pound sentiment, a look at EUR/GBP shows that the pair has staged a steady downward drift for most of this week. This situation is a rare find in a week with a BoE decision, among other central bank decisions. It is apparent that yesterday’s meeting presented nothing new for the markets to move on. The BoE only reaffirmed their backing of the quantitative easing program that they initiated last month. It is a real possibility that, judging by this week’s decision, the BoE meeting will become a non-event like the BoJ and even the Fed. It seems that at this point, all has been dispensed in their efforts. For future meetings, any surprise will come from either change in the asset purchases or in the event that the policy shows some signs of success. UK data will be sparse next week, emphasizing the housing market with DCLG House Prices and RICS House Price Balance.