Wednesday, March 28, 2012

GBPUSD Battle of the Banks

One of the great things about Forex trading is the various opinions on any Forex pair.  Chat rooms and forums will rarely see much of a consensus, with traders battling it out with their opinions.  Currently, we have such a battle in the GBPSUD from two leading banks in Europe.  On one side, Danish firm Danske Bank has recommended to clients to be buyers of the GBPUSD on nay dips with a target above 1.6000.  Contrasting their statements is German Commerzbank which believes the GBPUSD will see weakness as it tested but failed to cross above the 1.6000 figure. 

More on the Forex battle from FX Street
Karen Jones, analyst at Commerzbank, believes that it will be hard for the pair to stay at current highs. Jones sees that “GBP/USD has tested the 1.5992 recent high and psychological resistance at 1.6000 but has not managed to sustain a break above here. Directly overhead lies the 200 week ma at 1.6014 (the market has not traded above here since 2008). This is tough resistance for the market – it should provoke failure and we note that the daily RSI has yet to confirm the recent high.” The suggestion would be to engage in the following strategy: “short 1.5940, stop at 1.6015. Cover 1.5650.”
On the other hand, Danske Bank believes in taking the opposite position, by going long on the cross. On its technical update, the Danish bank recommends to go “long at 1.5830 for a 1.6036 objective, stop at 1.5900.”   Read More

So who is right? Lets here your opinion in our comments.  

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