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The GBP reached 1.6415 versus the USD

Varengold Bank Research Team from Varengold Wertpapierhandelsbank AG at 01/19/10


Good morning from beautiful Hamburg and welcome. The USD weakened against 15 of its 16 major counterparts. Below we analyze the USD versus the EUR and the GBP. Anyway, we wish you many success in trading today.

Market review

The JPY traded near a four week high against the USD, quoting 90.62, on speculation that the U.S. economic will recover slowly and the Federal Reserve Bank will keep its interest rates near zero to support the economic growth. Furthermore the USD weakened versus 14 of its 16 most traded counterparts before U.S. reports this week forecast to show that building permits rose at a slower pace as expected and manufacturing in the Philadelphia region fell. The USD dropped to a six week low against the GBP on speculation that the U.S. Company Kraft Foods Inc. will acquire the U.K. chocolate maker Cadbury Plc. The GBP reached 1.6415 versus the USD. Only the EUR lost ground versus the USD and dropped to 1.4399.

Futures on the Chicago Board of Trade show a 26% chance that the U.S. central bank, the Federal Reserve, will raise borrowing costs from its current range of zero to 0.25% by its meeting in June 2010. Last month, the Futures showed a 42% chance.


Since the beginning of January, the EUR has been trading in a sideways trend against the USD. Recently, the currency pair dropped to its bottom Bollinger Band and the prices could recover. During the last two weeks, whenever the prices touched the lower Bolls, the EUR climbed to the upper Bolls. Also a crossing MACD through the signal line from below may indicate a continuing bullish trend.


As you can see, the GBP is trading in a bullish trend channel versus the USD. Tonight, the currency pair crossed its Pivot Point at 1.6400. Now it seems that the GBP could continue its upward trend. The MA Oscillator may support that with a breakthrough by the signal line from below. But it remains to be seen if the GBP could confirm its aperture of the resistance at 1.6400.

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