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Forex: GBP/USD in a new lap to the upside

A risk-off feeling briefly took over the market, erasing the GBP/USD gains made during the London opening up to 1.5200. Having returned to the daily open price of 1.5157, the pair is at a new upside mode. However, there is no UK data to trade to. Only German CPI at 13:00 GMT before US GDP, jobless claims and Chicago PMI.

Italian Prime Minister Mario Monti warned that granting postponement of deficit targets harms credibility. Italy's President Napolitano said it is not possible to speed up process of forming new government and EU's Barroso is confident that next Italian government won’t undermine confidence that has been building.

“Yesterday's attempt for a break through 1.5080 failed and the pair is still in a ranging mode below 1.5237 resistance area”, wrote Deltastock.com analyst Stoyan Mihaylov, pointing to a negative outlook for a slide towards 1.5000 sentiment zone.

Identifying the true costs of sequestration as March 1 deadline looms

As the March 1 deadline looms on the horizon, market participants grapple the realistic likelihood of widespread spending cuts across the United States. As such, the impending sequestration is likely to yield far less than the $85 billion in the US budget savings in the short-term. Indeed, this is more reflective of the complex mechanisms the government allocates its resources. However, it identifies the likely scenario in which the spending cuts will ultimately serve as a detriment to and hurt the US economy – this in turn could lower tax revenue and foster heightened costs of social safety-net programs like unemployment insurance.
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Forex Flash: Bunds eye correction as resistance reached – RBS

According to Technical Markets Strategist Dmytro Bondar at RBS, “Bund prices have reached a strong resistance zone formed by the 145.20 Fibonacci retracement and filled-not-closed gap from the start of the year and formed a long-legged Doji star yesterday. The full target from the inverse head and shoulders pattern (144.94- 145.00 region) was met, where we recommended taking profits, as there are good chances of a correction to the 144.00 region. Weekly momentum is turning bullish, as indicated by the slow stochastic oscillator. Overall, favor being flat at the moment and wait for the correction to be over before re- loading longs.”
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