GBP/USD Retraces From 1.6596
November 30, 2009 - 6:37 am by Juan P. Bejarano · Leave a Comment
The pair did recover some of its lost ground from last weeks strong bearish move, but outlook remains uncertain as UK data continues to print slightly negative.
The GfK consumer confidence reading declined to -17 from -13 prior, while net lending to individuals was 0.3 billion, below the previous 0.6 billion. In addition, mortgage approvals, although slightly higher than the previous reading, came in below market estimates of 59K at 57K.
Concerns over Dubai World’s debt are now easing as the United Arab Emirates Central Bank said it will stand behind the local and foreign banks and will provide liquidity as needed.
Moves were seen to quell some fears, as investors moved back into riskier higher-yielding assets.
Ahead, traders will look at U.S. markets, as well as the Chicago PMI reading and the Chinese manufacturing PMI data due out in the Asia session.
GBP/USD, traded as high as 1.6596, before retracing 100 points to a recent 1.6470 low. The 1.6596 level, coincided with the 61.8% Fib from the move 1.6750 to 1.6270.
Although a rebound from current levels, 1.6476, is viable, further downside is still possible to the 61.8% Fib, before any renewed buying pressure should emerge.
The near term outlook is somewhat mixed and preferred strategy looks to stay on the sidelines for now.
With downward pressure, the pair finds initial support from current levels at 1.6430.
Following this level, GBP/USD will encounter support at 1.6393 and 1.6357 and 1.6270.
From current levels 1.6460, the pair finds resistance at 1.6596, followed by 1.6672 and the 1.6750.
TREND
Near Term: Bearish
Medium Term: Neutral
Long Term: Bullish
Trading levels in play:
Mixed Bias be careful of volatility, however look for possible buy setups at 1.6393 for short term moves, with take profits at around 30pips or so. There are no solid trade recommendations at the moment for intraday moves.
DISCLAMER: The above post is for information only. Before making your investment decisions please acknowledge that the information provided herein should not be taken without your own individual assessment and extensive investigation, it should not be preempted as your own trading strategies, investment advice and/or trading portfolio.
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