Peter Bain Forex Trading Commentary for Thursday February 16, 2006
Forexmentor.com Price Action
It sure looks to me like we've bottomed out on the pound, if you notice how price is respecting the most recent trendline on the daily chart, and if you take into consideration the fact that the big dogs are going longer with their COT positions.The GBP/USD pair appears to be very much oversold at all levels - price being below the 144 EMA, in each case. We had a 1-2-3 bottom occur well after the London open on the 15 minute chart - confirmed by a trendline break (which was validated by a MACD crossover). The key thing to watch for here is how pricerespects the trendline on the daily chart. A break 'down' would certainly be bearish for the pair. However, I wish to remind you that the commercial traders are going longer with their COT positions, which foretells upward price action at some point. Unfortunately, COT data is often early in relation to its effect on price direction. Note: When you have a trendline break, as referenced above, it is not unusual for price to come back and test it, before it carries on in its new direction.
See today's chart at: http://www.forexmentor.com/campaign/feb1606.html
See sample AM Review at: http://www.forexmentor.com/video/end-of-run-determination.html
Forexmentor.com News
The Bernanke testimony would lead one to believe that the Fed funds rate is going to at least 5%, although it would be safer to expect something closer to 5.5%, should unemployment fall further. There were no surprises in his testimony. The Fed is expected to firm its monetary policy at a measured pace to contain inflation. Alan Greenspan, Mr. Bernanke's predecessor, hiked rates 14 times over the past 18 months.
Stronger-than-expected retail spending in January showed sales rose 2.3% during the month. This was the most significant piece of news data to come out in weeks. With this new information, and unemployment being as low as it is, the economy isn't looking all that bad. That said, we must not forget the record trade and budget deficits and higher energy prices. At some point, these factors have got to weigh heavily on the economy, one would think.
It sure looks to me like we've bottomed out on the pound, if you notice how price is respecting the most recent trendline on the daily chart, and if you take into consideration the fact that the big dogs are going longer with their COT positions.The GBP/USD pair appears to be very much oversold at all levels - price being below the 144 EMA, in each case. We had a 1-2-3 bottom occur well after the London open on the 15 minute chart - confirmed by a trendline break (which was validated by a MACD crossover). The key thing to watch for here is how pricerespects the trendline on the daily chart. A break 'down' would certainly be bearish for the pair. However, I wish to remind you that the commercial traders are going longer with their COT positions, which foretells upward price action at some point. Unfortunately, COT data is often early in relation to its effect on price direction. Note: When you have a trendline break, as referenced above, it is not unusual for price to come back and test it, before it carries on in its new direction.
See today's chart at: http://www.forexmentor.com/campaign/feb1606.html
See sample AM Review at: http://www.forexmentor.com/video/end-of-run-determination.html
Forexmentor.com News
The Bernanke testimony would lead one to believe that the Fed funds rate is going to at least 5%, although it would be safer to expect something closer to 5.5%, should unemployment fall further. There were no surprises in his testimony. The Fed is expected to firm its monetary policy at a measured pace to contain inflation. Alan Greenspan, Mr. Bernanke's predecessor, hiked rates 14 times over the past 18 months.
Stronger-than-expected retail spending in January showed sales rose 2.3% during the month. This was the most significant piece of news data to come out in weeks. With this new information, and unemployment being as low as it is, the economy isn't looking all that bad. That said, we must not forget the record trade and budget deficits and higher energy prices. At some point, these factors have got to weigh heavily on the economy, one would think.
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