Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

British Pound, What Happened to the Weakness of Sterling?

Currencies / British Pound Aug 01, 2009 - 04:18 PM GMT

By: Seven_Days_Ahead

Currencies

Best Financial Markets Analysis ArticleThe Macro Trader’s view:
The Pound has staged a sometimes volatile recovery for much of this year. It is now far higher than the lows it reached during November and December 2008 when traders thought the UK would suffer most of the G7during the recession.


The Pound recovered as it became clear that the UK was not uniquely suffering. The US, Eurozone and Japan have also suffered steep contractions in economic growth.

Nonetheless, traders recently began again to question the relative strength of the UK after surprisingly negative comments from Bank of England Governor King.

Additionally, the credit rating agencies raised a question mark over the UK’S Sovereign credit rating and many questioned the sustainability of the UK’S current fiscal stance which looks disturbingly weak for years ahead.

Moreover, last week seemed to answer the question when a worse-than-expected Q2 GDP report was released. It showed the worst year-on-year GDP contraction in 60 years. But one week later the Pound is looking to resume its recovery against the Euro and is holding up against the Dollar, Why?

The market saw last week’s GDP data as grim, but the quarter on quarter report, while worse than consensus, was much better than the Q1 report, and offered the prospect that the worst of this contraction was over.
Additionally, retail sales last week came in stronger at 1.2% on the month and 2.9% on the year, so consumer demand remains alive and well, but of equal importance is the housing market.

Here too data has been improving and seems to show the housing market at a turning point. Today saw the release of the Nationwide Building Society House price survey and it rose by 1.3% on the month with the 3 month on 3 month rate also positive. It has now shown house prices rising for 4 out of the last 6 months.

The Halifax survey, although more patchy, has also recorded rising prices and the Land registry has for the 1st time in 18 months shown a price increase.

So while a boom isn’t around the corner and  there is a very realistic prospect of growth resuming later this year, the economy is clearly emerging from the worst of the downturn. How vulnerable then is Sterling to the downside against the three Majors?  For choice, we are wary of Cable.  But Sterling looks powerfully support against both the Yen and the Euro

The Technical Trader’s view:


WEEKLY SPOT CABLE CHART

Throughout June July and August the market’s rally stalled.

Technically there has been good resistance to overcome.

And that resistance remains.

But equally there is no stomach for a sell-off.

WEEKLY  CHART

The weakness of Sterling over the period of uncertainly from early June meant a serious attack on the resistance above the market at 0.8639.

That resistance held.

And now there is a Key Reversal on the cards for the week.
Watch Friday’s close.  

WEEKLY CHART

The weakening of Sterling from early June saw a bear assault on the support from the High at 151.50.

But that support has held.

And while there is no clear reversal signal yet, the market is free to go ahead.

Philip Allwright
Mark Sturdy

Seven Days Ahead
Be sure to sign up for and receive these articles automatically at Market Updates

Mark Sturdy, John Lewis & Philip Allwright, write exclusively for Seven Days Ahead a regulated financial advisor selling professional-level technical and macro analysis and high-performing trade recommendations with detailed risk control for banks, hedge funds, and expert private investors around the world. Check out our subscriptions.

© 2009 Copyright Seven Days Ahead - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Seven Days Ahead Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in