Friday, October 23, 2009
Today Forex Update :-
European markets advance after upbeat earnings; Pound collapses on GDP contraction
European markets are going through gains on Friday as an string of upbeat corporate earnings report has buoyed investors' sentiment. In Forex markets the Pound has collapsed after an unexpected contraction in UK GDP.
Eurostoxx 50 Index rises 1.05%, German DAX Index adds another 1.05% and the French CAC Index advances 1.1%. In the UK, the FTSE Index rises 1.0%.
On the macroeconomic domain the shock of the session has been the unexpected 0.4% decline in UK GDP, which, according to preliminary data makes the sixth consecutive negative quarter, the largest recession period on record.
Sterling plunges, euro back to highs
GBP/USD has dropped almost 300 pips after GDP figures were released, as the pair has dropped from from 1.6685, fresh 6-weeks high to a session low at 1.6410 where the Pound is attempting to set a bottom.
EUR/USD remains on the upside after having bounced at 1,4990 on early European session, and the pair advances around 1.5050, with year high at 1.5060 on sight.
USD/JPY uptrend from Tuesday's low at 90.05 has extended during European session as the pair broke above 91.70 to hit a fresh one-month high at 91.90, before easing back to 91.70 area at the moment of writing.
EUR/USD: Euro returns upwards and approaches 1.5060 high
Euro retreat from 1.5060 high has found support at 1.4990 on early European session and the Euro bounced, reaching back to 1.5050 with 14-month high at 1.5060 on sight.
Next resistance area, at the moment, lies at 1.5060 (session high), and above here, 1.5085 (Aug 11 08 high) and 1.5100. On the downside, support levels at 1.4990/00 (session low/ oct 20 high), and below here 1.4975 and 1.4940 (Oct 22low).
According to Per Enk karlson technical analyst at Advantage Financial GMBH, the Euro remains bullish while above 1.4920: "No clear break out above 1.50 as we were looking for, still bullish above 1.4920 with next resistance level now up at 1.5284."