By: Bastian Rubben
Wall Street keeps moving in zigzag as the stock markets closed on the red territory yesterday, though it looks like the momentum is with the bulls these days. The investors will look forwards today for important economic data, such as Philly manufacturing index, existing home sales and unemployment claims. On the results field, the focus will be on Bank of America (BAC).
The fact that the general atmosphere in the stock markets is positive helps most of the major currencies to strengthen against the USD. The pound was the leading currency that rose against the USD, as the pound investors were encouraged by better than unemployment claims & unemployment rate in Britain. From the technical analysis point of view, the pound is facing the resistance at 1.60 again, after it has failed in breaking it through several times during the recent weeks. Therefore, a successful break-up this time might pull many buyers to the market and they can launch the pound to the 7-months high at 1.615. Nevertheless, since the pound failed in doing so few times before, it could be the case this time and the currency might fall under 1.59 again.
The GBP resumed strengthening against the Japanese Yen as well. In this case, I will analyze the weekly chart of the pair GBP/JPY, since it gives a wider perspective. The pair has corrected 40% of the recent rally and reached Fibonacci levels that are proper for a bullish reversal and if the GBP crosses above the weekly high, it might continue to the recent pick at 133.30. Another important element that indicates for the bullish trend is the fact that the 20 EMA is close to cross above the 50 EMA, which means that the prices are getting higher.
