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British Pound Remains Under Threat of Another Bear Phase

Currencies / British Pound Jul 27, 2009 - 02:51 AM GMT

By: Seven_Days_Ahead

Currencies

Best Financial Markets Analysis ArticleAs with other markets GBP/USD has been broadly consolidative during June and July, with upside attempts being successfully repelled so far. In recent FX Trading Guides we have wondered if the 30-Jun spike to 1.6744 and drop back marked a blow-off move, in preparation for a better bear phase – and we still believe this is a prospect.


The FX Trader’s view


WEEKLY CHART:

Note how the 2009 bull move has stuck around the 38.2% level of the entire prior move down, and is also capped by the 50% level of the downleg that started from 2.0153 Jul-08 high.

DAILY CHART:

In the FX Trading Guide we had noted potential resistance from the small 76.4% level at 1.6565, which has worked very nicely.

(we currently hold theoretical short positions with stop just above 1.6600)

However, bears still need at least a close below the 1.5982 08-Jul low for a decent confirmation of their stance – the small channel base projection runs near here too now.

We would then initially target towards 1.5500, the 38.2% pullback level.

In some of the markets we cover we had recently switched to a

sidelined stance, but we had retained our bearish stance in GBP/USD. This fits in with our s/term bullish view of EUR/GBP (please refer to a previous Update for details).

Philip Allwright
Mark Sturdy

Seven Days Ahead
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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.

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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.

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