Apr 13, 2010

Forex Crunch GBP/USD Settles Higher Following Trade Balance

Forex Crunch GBP/USD Settles Higher Following Trade Balance

GBP/USD Settles Higher Following Trade Balance

Posted: 13 Apr 2010 02:39 AM PDT


British trade balance came out better than expected and gave GBP/USD the needed boost to settle above the important technical barrier. What’s next for this volatile currency?

British trade balance showed a deficit of 6.3 billion pounds in February. This was significantly better than the deficit of 7.3 billion that was expected and far better than the result last month – 8 billion deficit. This is the lowest deficit since August.

This surprise sent GBP/USD higher, above 1.54 once again. At the start of the week, the Pound followed the Euro and enjoyed the good news about the Greek crisis It began the week with a big Sunday gap -it traded at 1.5430, about 50 pips above the close and continued forward to 1.5485, not far from the resistance line of 1.5520. This breakout continued the move on Friday, and it seemed that the Pound’s direction is up.

But after escaping last week’s range trading, the Pound provided volatile trading. GBP/USD fell back down and filled the gap. Towards the release of the trade balance, the pair was testing the critical line of 1.5350 once again. The release gave it the boost to get away from this line.

The rest of the week contains mostly American figures. American trade balance is due soon, followed by American CPI and retail sales on Wednesday. Apart from American indicators, the Pound will move by news towards the British general elections due on May 6th.

GBP/USD technical levels

On the upside, the lines to watch are 1.5520 as a minor resistance line, followed by 1.5833 as a major resistance line. The 1.5833 line proved to be very strong – the failure to break it eventually led to a collapse of the pair.

Looking down, a drop below 1.5350 will lead to test the 1.5110 line, which supported the Pound recently. Further below, 1.4780 is the 2010 low, but it’s quite far now.

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Forex Daily Outlook – April 13th 2010

Posted: 12 Apr 2010 01:00 PM PDT


After a wild opening to the week, we have many indicators today. American trade balance and a speech by Bernanke are the highlights of the day. Let’s see what’s awaiting us today.

Most weekend gaps were filled after the initial shock that was seen in the wake of the new week. Note that the Euro and the Swissy still got to keep their gains. Let’s start:

Australia’s NAB Business Confidence starts the day, and it’s expected to drop from the high score of 19 points it reached last month. The Aussie’s breakout on the weekend gap was shattered.

For more on the Aussie, read the AUD/USD forecast.

In Europe, German Final CPI is expected to confirm the initial read of 0.5%. The WPI (Wholesale Price Index) will probably rise by 0.5%, stronger than last month. French consumer prices are expected to rise by 0.5%, similar to last month. Stronger rises are needed in these inflation figures to push the Euro higher.

For more on the Euro, read the EUR/USD forecast and Casey Stubbs’ latest analysis.

In Britain, Trade Balance is predicted to show a smaller deficit – 7.3 billion instead of 8 billion. The Pound’s breakout was erased during the day.

For more on the Pound, read the GBP/USD forecast.

Trade balance is also published at the same time in the US and Canada – the American deficit is predicted to grow to 38.5 billion, slightly higher than beforehand, while the Canadian surplus is expected to remain similar to last month 700 million.

Also in Canada, the New House Price Index (NHPI) will probably rise by 0.5%, better than last month’s rise.

The loonie is still struggling with parity.For more on the loonie, read the USD/CAD forecast.

American Import Prices are predicted to rise by 0.9% after a drop of 0.3% last month. Also in the US: Treasury secretary Timothy Geithner will speak before the American Society of News Editors and might move the markets on comments about the Yuan.

A bigger speech is expected by Ben Bernanke at the National Bankers Association Foundation Literacy Summit. Last week, he didn’t say anything important, but he may always surprise.

In New Zealand, retail sales are predicted to rise by 0.2%, less than last month’s 0.8% rise. Core retail sales are expected to rise by 0.3%, similar to last month’s 0.3% rise.

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American Indicators, Greece and Gaps in the Video Outlook

Posted: 12 Apr 2010 12:36 PM PDT


On the weekly interview on Forex TV, I spoke with Julie Sinha about technical this week’s major events, the impact of Greece on markets, technical levels of all the majors and where the action is. Enjoy!

Want to see what other traders are doing in real accounts? Check out Currensee. It’s free.
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