The Advisor Weblog

GBP/USD, long term bearish potential increasing

Posted: 12 May 2011 03:46 AM PDT

Pound bearish potential against dollar increases as the pair approaches 1.6240 daily ascendant trend line coming from early January. Here is the daily chart:

And here is the short term, intraday perspective:

http://www.fxstreet.com/technical/forex-strategy/the-best-pair-to-trade-now/2011/05/12/

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Starting the day

Posted: 12 May 2011 02:52 AM PDT

Hi everyone! Another day another dollar gain; Asian share markets fell increasing the risk aversion sentiment, and the European morning is seeing stocks and commodities extending their slide, with EUR/USD nearing key 1.4140 area, 38.2% retracement of this year bullish run. Bearish momentum in the daily chart suggests a break below that level will be an initial acceleration towards the 1.3850 area, over the upcoming days.

GBP/USD was hit but worse than expected manufacturing data, and also extended it slide to fresh lows, at 1.6260, although bounced back higher hovering now, around 1.6300. The pair has a daily ascendant trend line @1.6240, coming from early January this year, so again a break below that last should increase the bearish momentum in the cross yet 1.6180 just below comes as next support. Only below this last the bearish momentum could accelerate.

Commodity currencies are also on the negative side, as almost any major currency except JPY that holds in range. USD/JPY is meant to extend its fall from current 80.80 area, probably towards 80.20 today. In one word, market negative sentiment will see dollar and yen extending its gains today.

Here is the link for today's calendar:

http://www.fxstreet.com/fundamental/economic-calendar/

Have a great trading day!