The British Pound May Rise Above 1.55 Says Citigroup

Daily Forex Fundamentals | Written by Finotec Group | Jan 08 09 09:45 GMT |

The British pound may rise 4.4 percent against the dollar to $1.5724 should the currency close above so- called resistance at $1.5165, technical analysts at Citigroup Global Markets Inc. said. The resistance level represents the 55-day moving average, which has curbed gains in the pound since the start of August 2008, wrote New York-based Tom Fitzpatrick and London-based Shyam Devani in a research note yesterday. Resistance is where sell orders may be clustered. 'A breach of that level on a close basis would be a bullish indication that the pair could go on to test $1.5724 in the short term,' Fitzpatrick and Devani wrote. The GBP/USD is currently trading at $1.5036 as of 8:40am, GMT. The yen advanced for a second day against the dollar after rockets fired from Lebanon struck northern Israel, prompting investors to seek the perceived safety of Japanese assets. Japan's currency gained for a fourth day versus the euro on speculation Israel's war with Hamas in the Gaza strip will engulf other parts of the Jewish country. The Swiss franc also rose against the euro and the dollar, while the British pound fell for the first day in four against the dollar on speculation the Bank of England will lower interest rates at a meeting today. 'This is a combination of problems in the Middle East and risk aversion,' said Gerrard Katz, head of foreign exchange trading in Hong Kong at Standard Chartered Plc, the U.K. bank that gets most of its profit from Asia. 'It's natural for the yen to strengthen, because it's viewed as safe.' The USD/JPY is currently trading at 91.80 as of 8:56am, GMT. Options traders are the most bullish on the Canadian dollar in 13 months amid a rebound in commodity prices since the start of the year and as the U.S. appears to lapse into a prolonged recession. Traders are paying the largest premium for Canadian dollar call options, which grant the right to buy, over puts that provide the right to sell the currency, since November 2007. 'The market tried to get above C$1.30 three times and was rebuffed,' said Dustin Reid, director of currency strategy at RBS Global Banking & Markets in Chicago. 'After the triple top,' options traders increased purchases of dollar calls. The USD/CAD is currently trading at 1.2040 as of 9:10am, GMT. Economic Calendar Time (GMT) E Event Currency Period Previous Previous Significance 19:00 ECB President Trichet Speaks EUR *** 15:00 Ivey PMI CAD Dec 40.2 37.5 *** 13:30 Unemployment Claims USD Weekly 492K 545K *** 12:00 Interest Rate Statement GBP Jan 2.00% 1.50% **** 10:00 Consumer Confidence EUR Dec -25 -26 10:00 Unemployment Rate EUR Nov 7.7% 7.8% ** 07:00 Trade Balance EUR Nov 15.8B 14.0B ** 06:45 CPI m/m CHF Dec -0.7% -0.3% 06:45 Unemployment Rate CHF Dec 2.7% 2.8% 00:30 Building Approvals m/m AUD -5.4% -1.4% *** 00:30 Trade Balance AUD 2.95B 2.05B *** Finotec Group Inc. http://www.finotec.com/ Disclaimer: FINOTEC Tradings Market Commentaries are provided for informational purposes only. The information contained within these reports is gathered from reputable news sources and not intended as investment advice. FINOTEC Trading assumes no responsibility or liability from gains or losses incurred by the information herein.