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British Pound and Euro Poised to Breakout to Upside

Discussion in 'Forex Daily News & Outlook' started by forextrends24, Jul 31, 2009.

  1. forextrends24

    forextrends24 New Member

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    Today’s sample of Forex Analysis from ForexHound.com


    The catalyst behind Friday’s huge drop in the Dollar was a better than expected government report. Traders aggressively sold the Dollar after the government reported a lower than estimated decline in 2nd Quarter GDP. Today’s number suggests that the U.S. economy is closer to a recovery. This triggered greater demand for higher risk, higher yielding assets.

    The strong rally in the GBP USD helped put this currency pair in a position to breakout to the upside next week. A spike through 1.6585 turned the main trend to up on the daily chart and triggered an intraday breakout rally on Friday. Currently this currency pair is in a position to challenge the June top and high for the year at 1.6743. In addition to the weaker U.S. GDP number, traders are anticipating a change in the Bank of England’s asset buyback policy at next week’s central bank meeting. There is even speculation building that the BoE will be the first central bank to raise interest rates. The odds are low however that this will occur during this meeting.

    Stronger appetite for risk also triggered a breakout rally in the EUR USD. For most of this week, this currency pair had been working on a possible weekly closing price reversal, but the rally today put an end to that possibility. The current upside momentum indicates that this market may be poised to test the high for the year at 1.4337 next week. If upside momentum continues like it was on Friday then the Euro may see 1.4500 fairly easily.

    Read full article at ForexHound.com as well as Forex Analysis, Forex Education and exclusive timely market Gann Analysis

    Disclaimer: Trading foreign exchange on the margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore should not invest money that you cannot afford to lose.
     
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