DowntownForex

GBP Hits 2009 High

By FXStreet -

A massive turnaround for the dollar as the risks reverse their positions post GDP figures assisted by soaring oil prices. The dollar continued to fall against all majors in thin trading conditions, the Euro, pound, franc and yen all gaining ground. With oil back above $70 per barrel, along with stocks continuing to push higher, we could all assume that we are out of the recession? In these thinner conditions and the fact that we are heading into the holiday season, gold will be the stable trade as the level of uncertainty within the stockmarkets latest moves continue. Former FED chairman Greenspan however did give stocks a boost stating that the recession may be ending. The fact still remains that no one is stating that we ARE indeed out of the recession, so still expect volatility certainly through the remainder of the summer.

European stocks continuing to move higher this morning assisting the cables lift to 1.6798, up 100 points on the day, the highs for 2009. Also seen strengthening against the Euro this morning which is trading at 84.80 at time of writing. Should the PMI figures come out better than forecast, expect the cable to continue its drive northwards. Next band of resistance at 1.6850. The next major resistance level at the 50% fib ret level for the last 2 years at 1.7330 now seeming achievable should earnings, stocks and oil continue to rise. Support back at 1.68 ahead of 1.6780 and 1.6750.

Eurodollar trading now back below the key resistance level of 1.43, being driven back down from the strength of the pound, not the dollar in early trading. Currently at 1.4275, expect further pressure when reaching the 1.43 figure once again. Should however the Euro follow the sterling trade, and holds above the 1.43 level, expect a move higher to 1.4335 ahead of 1.4370. Support now at 1.4240 ahead of 1.4195 (38.2% ret level for the weeks trading).

Yen also seen gaining now at 94.85 having hit the 38.2 ret level for the week at 95.06. Next support level at 94.60 and if continues, could see a move back down to the lows of Wednesday at 94.00/05. Resistance at 95.05 ahead of 95.20 and 95.50.

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