GBPUSD Analysis Update May 4th 2012
- The GBPUSD currency pair has seen corrective downside price action this week following a strong bullish run over previous sessions (see the daily GBPUSD chart below).
- Speculators increased bullish wagers by 123% on the previous week according to the latest CFTC COT report (commitment of traders). British pound net longs increased from 7,536 to 16,493 on the 1/5/2012 reporting period.
- The pound to dollar exchange rate has closed this week around the key 1.6150 area which represents the October/November 2011 swing highs. This previous resistance level still has potential to act as support in the near to medium term but a failure to sustain here could see a drop to 1.6050 in the first instance.
- 1.6050 is a recent swing high and the 23.6% Fibonacci retrace of the last bullish wave higher.
- The GBP/USD has dropped almost .75% on the weekly basis and closed the week under recent range lows after the NFP data today showed U.S. hiring for the month of April rose less than anticipated. The Nonfarm payrolls report showed the US economy added 115,000 jobs within April; this came as the unemployment rate fell to 8.1%, which is down from 8.2% in the prior month.
- Add to the above the rumors that suggest Spain’s Banco Santander, a major financial institution, has now requested additional financing from the ECB. Greek elections this weekend likewise helped cap risk assets heading into the end of the week.
- The ascending trend line shown below would need to be broken to the downside to mark a change of trend in the longer term. This trend line is closely aligned with the 50 day Moving average.
- Sterling Gold Prices fell as low as £1006 per ounce on Friday which is the lowest level in 2012..
Pound To Dollar Analysis