Thursday, February 3, 2011

FOREXYARD: Forex News Blog

FOREXYARD: Forex News Blog

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Technical Tip – GBP/USD Breakout

Posted: 01 Feb 2011 11:48 PM PST

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The GBP/USD appears set to end its 5-month period of sideways trading as the pair is currently testing the upper boundary of a consolidation pattern.

A surprisingly strong January has helped the Cable come off of its December lows and the pair is now testing a trend line that falls off of the August 2009 high. The trend line comes in this week at 1.6160.

Should the GBP/USD breach this trend line, the path higher is littered with resistance levels. The first target would be the October 20010 high at 1.6300, followed by the January 2010 high at 1.6460. This price level should have added significance as it coincides with the falling trend line of the 2007 high. Further resistance is found at the November 2009 high of 1.6880, followed by the August 2009 high of 1.7040.

If the long term trend line holds and the GBP/USD will move lower, support is located at the previous week's low of 1.5750, followed by the rising trend line off of the May lows which comes in this week at 1.5520. Further support may be found at the December 2010 low of 1.5340.

While it may not be relevant at this time, a distinct head and shoulders pattern is identifiable with the neck line below the September and December lows of 2010. A move above the 1.6300 level would nullify this reversal pattern.

GBPUSD_Weekly

US Employment Numbers and Crude Oil Inventories Due Up

Posted: 01 Feb 2011 10:53 PM PST

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With an abnormal number of news events coming from the Europe, United States and New Zealand today, forex traders have been in frenzy to place their bets before the trading day gets underway. Trading during these news events, which typically carry a lot of market volatility, is a fast way to double your forex trading balance; the wise trader knows this. Special attention should be paid to the ADP Non-Farm Employment Change report at 13:15 GMT, the Crude Oil Inventories at 15:30 GMT. Will you take advantage of the impending volatility, or sit on the sidelines and miss out?

Here are a few of today's leading events:

13:15 U.S. None-Farm Employment Change
This is monthly report that measures the change in the number of employed people during the previous month, excluding the US farming industry and government. This indicator typically creates a volatile trading environment, affecting not only the USD crosses but also the value of crude oil and gold. Disappointing results could send the EUR/USD pair above the 1.4000 resistance level.

14:30 GMT: US Crude Oil Inventories
Crude oil's rising price has been a headline feature of the market in recent weeks. This release may reign over the market as the price of oil has gained relevance to today's trading.

A growing level of inventories may signal a lack of demand and push prices lower, while a negative release may highlight a lack in supplies, increased industrial usage, and an overall demand for more oil, which may help oil prices climb back towards $92 a barrel in the short-term.
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