Latest Foreign Exchange Market Report 6th May 2009

Foreign Exchange

The Pound rallied to the strongest level against the Dollar in four months yesterday, rising to a high of $1.5160 in London.

GBP/USD closed higher on Tuesday and above the 20-day moving average crossing confirming that a short-term high has been posted. The high-range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are bullish signalling that sideways to higher prices are possible near-term. If it extends last week’s rally, the reaction high crossing is the next upside target. Closes below the 10-day moving average crossing would confirm that a short-term bottom has been posted.

EUR/USD closed lower due to profit taking on Tuesday as it consolidated some of Monday’s rally. The low-range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI remain bullish signalling that sideways to higher prices are possible near-term. If it extends this week’s rally, the reaction high crossing is the next upside target. Closes below the 20-day moving average crossing would temper the near-term friendly outlook in the market.

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