Mid-week Analysis on EURGBP Cross Rate

With the USD weakness still continuing as of this writing at the levels of 79.15bp; the next target to watch for would be the 78.10/20bp which would find some prices to bounce back for a slight correction same way from the opening of the week. This has supported the Euro to continue higher reaching 1.3545 while the cross rate EURGBP establishing a 0.8571 high which simply reinforces the strong market sentiments for the major players in the market. With the institutions adjusting prices prior to the closing of the month and futures expiration is weighing heavily between spot and futures financial prices. Not to mention, Gold's making a stronger comeback moving higher above the USD1300.00/oz which has kept the USD more on the defensive heading lower.

Meanwhile, the EURGBP cross rate is well extending its trend higher and the next levels would be towards the 0.8635-80 range just about the the week of May 23, 2010 trading range. The 61.8% price range would be at the 0.8765-80 levels and we still have a few days of trading data coming out of the market place. Certainly, a lot of these broker analyst that have been more on a pending Euro correction and adjusting their recommending prices higher without admitting their continued biased outlook which may hold detrimental to a trader's market analysis. There after would not even want to discuss and offer some other market outlook.

As long as the USDX shows no signs of a recovery this will spill-over an October month of uncertainty. The market behavior remains the same with increasing risk aversion from other smaller traders and retail investors which we suggest to stay sidelined from these market volatility. Catching market movements without the appropriate trade plan and investment funds may well be dangerous specially if the tolerance levels of the inventors and traders at that are simply limited.

With that said, the EURUSD, EURGBP, AUDUSD are the pace setters and the GBPUSD, NZDUSD lagging behind the leaders. Some expected intra-day corrections towards the closing may show but not necessarily true if and when continues volumes from fresh position adjustments can be found in the futures market by the next few days of trading activities.

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