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This was the biggest three day gain in more than two months

Varengold Bank Research Team from Varengold Wertpapierhandelsbank AG at 10/18/09


Good morning from Hamburg and welcome to our last Daily FX Report of this week. Today, we would like to report about the GBP and some interesting data from the U.K. However, we wish you a successful trading day and a beautiful weekend.

Market review

The GBP climbed the most in more than eight months versus the EUR and reached 0.9186 on speculation that policy makers will reduce their bond buying program as the economy shows signs of recovering from the recession. Also the GBP/USD jumped to 1.6344. This was the biggest three day gain in more than two months. The GBP dropped 7.2 % versus the EUR since June 2008 as the central bank increased its asset purchase program and the Bank of England Governor Mervyn King said that the GBP`s weakening is helpful for the economy. Yesterday the number of people in the U.K. without a job benefits increased by 20,800 in September, less than the forecast, a report showed. The GBP relative strength index climbed to more than 43 above the important 30 threshold.

In the U.S. the former Federal Reserve Chairmen Alan Greenspan said that he’s not overly concerned about the recent weakening USD, while warning of long term costs to the country and its currency from the rising national debt.


Since the middle of September, the EUR has been trading in a bullish trend against the CHF. During the last four days, the currency pair has started a downward movement but at its support line according its Pivot point, it recovered and the prices climbed again. Furthermore, a crossing MACD through the signal line from below may indicate a changing trend. Next resistance Pivot Point is at 1.5233.


During the middle of September, the GBP/AUD has been trading in a bearish trend channel. For a few days, the GBP touched its support line at 1.7380 and recovered to the upper trend channel line. The last two times as the currency pair reached the upper trend line, the prices rebounded. Also the RSI could support a continuing bearish trend for the GBP/AUD.

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