Widening Deficit Weighs on British Pound

The GBP USD is trading weaker during the the New York session.Short-term the market is feeling pressure from the stronger Dollar dueto the flight-to-safety rally caused by the Swine Flu outbreak.

The GBP USD is trading weaker during the the New York session. Short-term the market is feeling pressure from the stronger Dollar due to the flight-to-safety rally caused by the Swine Flu outbreak. Longer-term investors still feel bearish about the British Pound because of the contracting U.K. economy and the widening budget deficit.

Losses may be limited today if news regarding the Swine Flu remains steady. Any news regarding an acceleration of the disease would be bearish.

The friendly U.S. Consumer Confidence report and the better than expected U.S. Housing Price report triggered some short-covering but failed to deliver a change in trend to the upside on the hourly chart.  

The resistance is 1.4690 – 1.4694.  The current short-term range is 1.4515 to 1.4690 which makes 1.4603 to 1.4582 key pivot zone. Look for this pair to trade both side of this zone until it is ready to make its move.

James A. Hyerczyk has been actively involved in the futures markets since 1982. He has worked in various capacities within the futures industry from technical analyst to commodity trading advisor. Using W. D. Gann Theory as his core methodology, Mr. Hyerczyk incorporates combinations of pattern, price and time to develop his daily, weekly and monthly analysis. His firm, J.A.H. Research and Trading publishes The Forex Pattern Price Time Report... More

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