Ralph Shell @ 3:35 PM, Wednesday November 25 2009
The pound did share in the rout of the USD, today but was not one of the currencies leading the charge. Comments by the Fed that seems to imply that their policy for the USD's value was merely one of benign neglect, with the outcome not a major concern set the stage, and started the dollar lower. Many traders, who had been wary that the short dollar positions were too popular, were now less hesitant to again short the dollar, as it looks like some of the risk has been removed.
This morning it was reported that the British revised GDP was a -0.3%, as expected and a tick better than the -0.4% in the previous report. The US reports were mixed with the durable goods less than expected, and initial unemployment numbers lower than forecast. A survey of economists by Bloomberg estimated that there were only 125,000 jobs lost during November, which is a big improvement.
Yesterday we observed that the 2H chart of the pound looked like it had some upside potential, which proved to be the case. Currently we are trading at 1.6713.
The 4H chart displayed here still looks constructive but with the Thanksgiving holiday tomorrow, we really do not want the exposure and the worry over the holiday. Sometimes strange things happen when the market is illiquid.
We are getting some nice movement on the EUR/GBP.
We were able to get this pair bought at the .8980 level this morning, but fearful of holding for the long weekend took profits too early. It still looks like the Euro wants to lead the pound, so we will try to re establish the position in the vicinity of .90. Have a great Thanksgiving!!!
Author: Ralph Shell - ForexRazor Analyst - Graduated from a small Ohio liberal arts college. Graduate studies in economics and history at Duke University. Ten years experience trading cash commodities in domestic and export markets. Former commodity analyst with Merrill Lynch in Chicago. Member of and floor trader at the Chicago Board of Trade for 18 years.