Market Outlook-Jan 29th ‘09
I have met my monthly quota or target for this month and i was thinking of not trading. However, the commitment to this blog spurs me on and i have so many wonderful people from all over the world commenting me on facebook, on this blog and everywhere else which really keeps me going. Thank you all for your support!
Well, back to work; FOMC and RBNZ announcement knocked some sense into the market with risk aversion mentatility kicking back in. Despite the increased buying of sterling and the risk appetite shown by the market, the real situation isn’t very rosy. Obama’s bailout plan has no republican support and they are going to drag it further with the Senate, even though it is passed, people and the market in general are not confident enough with the market. Having said that, the FOMC session last night reiterated the message that there is no room for further interest rate cuts and the road to rebuild the US economy has started now, with polls showing that most people think that the US might be the quickest to get out of recession. Proven numbers or false optimism, we shall see.
Nonetheless, this sentiment is putting USD in very strong position once again and we should see the Gbp/Usd come down today. It has lost almost all gains it took yday, and since FOMC high’s it has lost about 300 pips, slightly less. I will be looking to short gbp/usd and gbp/jpy, much like yesterday and i am bit more confident as the asian session is pointing in the same direction.
Bottomline
Short Gbp/Usd – 1.4100-14130 area – TP 1.4010, If it breaks 1.40 area, we might see 1.37, by today, if not possibly by tomorrow.
All the best,
Seeni
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Seeni J G
