GBP Trendline Breakout

Discussion in 'Forex Trading' started by DannyBly1, May 22, 2008.

  1. Wednesday's trading session ushered in record oil prices, a gloomy fed forecast and a selloff in stocks, the Dow losing 227 points. Today we have Initial Claims at 8:30 EST.

    Policymakers expect weak economic growth and increased unemployment in the remainder of 2008. However the specter of increased inflation will probably prevent further interest rate cuts. While lower interest rates encourage economic growth they do so at the risk of creating excessive inflation.


    The dollar saw it's largest two day decline against the euro since March and it may face further punishment with the release of the Existing Home Sales number. The Euro was strenthed by rise in German business confidence (unexpected increase for May) and followed on the heels of Monday's hawkish comments. Let's take a look at the technicals:



    The GBP is maintaining it's recent strength as a result of inflationary fears and weakness in the USD - related to rising oil and negative fundamental data. We saw an important trendline break and are currently approaching resistance at 1.9879.



    The Canadian Dollar has been benefiting from the release of strong fundamental data and the record oil prices - with fresh highs this morning (135$). Let's take a look at the technicals: