Dollar under pressure, here’s why
Dollar remains under pressure today against majors. A couple of dollar negative comments were delivered to the markets since yesterday and they’re still weighing on the greenback. PoBC Governor Zhou Xiaochun said that the China will keep diversifying its foreign exchange reserves away from dollar. ECB President Trichet wrote in the Financial Times yesterday, saying that ECB needs to address money-supply growth. BoJ Governor Fukui expressed concern over the carry trade position. Bernanke, Trichet, Zhou and BoJ Deputy Governor Iwata will speak on monetary policy in Frankfurt in US morning and market will be paying attention to further comments from them.
GBP/USD
Daily Pivots: (S1) 1.8989; (P) 1.9035; (R1) 1.9098;
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Cable’s rally from 1.8973 extends further to as high as 1.9177 so far. Break of 1.9142 indicates the rally from 1.8517 has resumed. At this point, as long as cable stays above 1.9071 support, short term bias remains on the upside and further rise should be seen. Touching of 1.9071 will term short term outlook consolidative first but downside should be contained by 1.8946 support and bring rally resumption.
In the bigger picture, firm break above 1.9142 high will confirm both rally from 1.8090 and medium term up trend from 1.7047 has resumed. Next upside target will be 2004 high at 1.9554, with 100% projection of 1.8090 to 1.9142 from 1.8517 at 1.9569. Meanwhile, below 1.8946 will be the indicate rally from 1.8517 has made a top already and risk deeper pull back to 1.8860 resistance turned support.
Read full report (EUR/USD, GBP/USD, USD/CHF, USD/JPY) here.
Shing-Ip Tsui is the founder and CEO of
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