US Dollar
Having held firm three weeks ago the technical support at $1.58 looks solid. Unfortunately, the resistance at $1.67 looks equally rigid. The break, when it comes, is more likely to be upward than downward but that does not remove the need for protecting the downside. Buyers of the dollar should place a stop order somewhere south of $1.58 and be patient. The cautious strategy is still to buy now half the dollars you will need. If you feel comfortable in doing so, leave a larger percentage uncovered in anticipation of a proper rally but do not forget that stop order.

Euro
In sterling’s current mood it seems able – though maybe not without some effort – to push through every obstacle in its way. The dip a fortnight ago almost to ?1.16 suggests that level is the new support line. The next obvious obstacle is the psychological one at ?1.20 (although ?1.19 poses a barrier of its own). Beyond that, the more important technical resistance is the early December high in the region of ?1.2150. Buyers of the euro should bide their time, using a stop order to protect against a reversal.

Support and Resistance levels
When watching the currency markets, a foreign exchange dealer will monitor movement within a range. This range is determined by 2 indicators, support (low) and resistance (high) levels. For example, the current range of the Euro would be 1.16 to 1.20. As a buyer, you would look to purchase your currency at the higher end of this range. Imagine support and resistance levels as a room with a floor and ceiling, and the exchange rate as a rubber ball. The ball will bounce off the floor and hit the ceiling, and bounce back down to the floor, back up to the ceiling and so on. At some point, the ball will break through either the floor (support), or the ceiling (resistance). In the real world, the support or resistance level is weakened by data coming out of the market, such as retail sales figures, consumer confidence data, interest rate announcements etc. If there is enough positive or negative data, the exchange rate will break either the support or resistance level, and begin trading within a new range. Your foreign exchange dealer will use their currency market knowledge to provide you with guidance, helping to protect you from negative movements and enabling you take advantage of the positive ones.

Colordarcy VIP Members can directly contact Mr. Deane Roe, Account Manager at MoneyCorp and he will discuss the options that are available to you. Please call him on: +44 (0) 207 828 7000 or email: deane.roe@moneycorp.com and quote reference: Colordarcy10.

To register with Moneycorp now, click here – http://www.moneycorp.com/CFX/?ReferringAgentID=10147610

Kind regards

Deane Roe
Account Manager
MoneyCorp

The dollar has been weakening across the board as the global appetite for risk increases. Over the last year and a half, investors have bought dollars because of their risk aversion. The dollar has acted as a world reserve currency. Investors have largely been buying US Treasury bonds which are low yielding. As the global outlook is beginning to improve investors are seeking a higher return and moving out of the dollar. This has significantly accounted for the move from the 1.40’s to 1.60’s.

An undervalued pound is attracting a lot of attention at the moment. There are signs that the UK economy is not worsening, although we are still some way off a definite recovery. The recent IMF report stated that the UK is well positioned for sustained growth. This was a significant reversal from the damning outlook they painted earlier in the year.

The possibility of further ?quantitative easing’ in the states should keep the dollar under pressure and could see it trade up to a technical level of 1.64. Having been heavily sold over the last few weeks there is still a good chance we will see a correction back down below 1.60 in the not too distant future. Longer term the risk remains that it could trade higher.

Since exchange rates are always on the move, foreign exchange specialist Moneycorp, offer the option to ?lock’ into the current rate of exchange for up to 2 years. This is known as forward buying. Should there be a move back to the 1.60 level from current 1.64, forward buying would save you in excess of £4000 on a £100,000 transfer.

Alternatively, you could take advantage of the guidance offered by a Moneycorp dealer and use a stop loss and/or limit orders. This is where you instruct your personal dealer to either automatically buy your required currency, or contact you should the exchange rate reach a certain level. The flexible nature of market orders, coupled with the expertise, market knowledge and dedication of the Moneycorp dealing team, will ensure that your foreign exchange needs are managed proactively, 24 hours a day.

I would recommend that Colordarcy VIP Members seriously look at the option to ‘lock’ into current rate right now, before rates start to fall back.
Please find below the most poignant paragraph that suggests pound’s rally will NOT continue:

Geoff Kendrick, a currency strategist at Swiss bank UBS, says that the big risk is that stock markets will begin to fall, thus removing the main factor behind the pound’s recent rally. “We think the rally is overextended,” he says.

A survey of 60 foreign exchange strategists taken in early May by the Reuters news agency appears to back up this view. The poll expected the pound to trade at $1.48 in six months’ time and $1.53 in a year.

To help make your money go further when buying a property, we are proud to announce a partnership with MoneyCorp to give you access to some of the most competitive exchange rates available in the market.

Colordarcy VIP Members can directly contact Mr Deane Roe, Account Manager at MoneyCorp and he will discuss the options that are available to you. Please email: deane.roe@moneycorp.com and quote reference: Colordarcy10.

Take advantage before the window of opportunity closes.

Kind regards

Loxley McKenzie
Managing Director