Sterling keeps regaining some upside strength

GBP/USD Current Price: 1.5907. Pound keeps regaining some upside strength, yet mostly due to corrective movements both in EUR/GBP and GBP/JPY; slightly bullish in the hourly chart, with 20 SMA acting as dynamic support, pair needs to clearly overcome the 1.5930 area to extend the upside movement, with next resistances at 1.5970 and 1.6020 area.

“Under 1.5840, pair should resume downtrend and extend current movements to the downside,” said

Support levels: 1.5880 1.5840 1.5790. Resistance levels: 1.5930 1.5970 1.6020.

• GBP/USD

GBP/USD (Sep 29 at 05:29 GMT)

1.5942/47 (0.39%)

H 1.5958 L 1.5872

S3	S2	S1	R1	R2	R3
1.5856	1.5896	1.5935	1.5952	1.5992	1.6032

[?]Trend Index	[?]OB/OS Index
Slightly Bullish	Neutral
Data updated on Sep 29 at 05:20 (15-minute timeframe)

[ View GBP/USD Technical Studies ]

EUR losing ground across the board

No major moves as of yet but the EUR has lost its' "darling" status amongst traders and long positions are being chopped across the board. EUR/GBP, EUR/JPY and EUR/USD are all trading heavily in the first hour of Tokyo trade. Dealers say that it is mainly flow driven with accounts starting to book profits on more medium term positions.

Asian Shares Higher; Japan Auto, Tech Stks Up On Easing Yen

SINGAPORE -- Asian shares pulled higher Tuesday, on the back of Wall Street's gains. Stocks of Japanese automakers and technology companies recouped some of their recent losses as the yen weakened following Monday's rally.

Japan's Nikkei 225 gained 1.0% and South Korea's Kospi Composite rose 0.5%. Australia's S&P/ASX 200 was 1.8% higher while New Zealand's NZX-50 was up 0.7%. Dow Jones Industrial Average futures were 1 point lower in screen trade after rising 1.3% Monday, for its first gain in four sessions.

"There's a lack of fundamental news, so sentiment is getting more important in determining the market's daily direction. And the overnight rebound in the U.S. markets certainly helped improve sentiment today" in Seoul, said J.J. Park at Taurus Investment & Securities.

Japanese stocks were higher as the U.S. dollar popped past the Y90 mark, after sharp losses recently. The weaker yen helped automotive and technology exporters recover from Monday's losses with Toyota Motor up 1.1%, Honda Motor up 1.9% and Sharp up 1.0%.

Still, caution was advised as "today's buying is just short-covering, so (the market's) gains will be limited," said Yumi Nishimura, market analyst at Daiwa Securities SMBC. "The foreign exchange market is going through a correction after the yen strengthened a bit too much against the dollar recently," she says. However, "The market remains cautious about possible further yen strengthening near-term."

In Korea, Daewoo International was up 4.8% on an edaily report that the company picked Hyundai Heavy Industries as its preferred bidder to construct offshore facilities in Myannmar. Hyundai Heavy was up 0.5%.

Australian stocks set a fresh 11-month high with NAB up 2.5%, Macquarie up 2.2%, BHP Billiton up 1.9% and Origin Energy up 2.5%.

IG Markets analyst Ben Potter said U.S. mergers and acquisition activity was rubbing off on the Australian share market and high cash levels could fuel further gains. He added that a sustained break above 4,750 would point to 4,800 as the next resistance, though traders should wait for a daily close above 4,750.

The New Zealand market was up on Wall Street's positive note. "We are firmer on the back of offshore markets having another rebound again. The blue chips, with the exception of Telecom, are trading higher, in particular Fletcher Building," said Hamilton Hindin Greene broker Grant Williamson. "Investors are looking at which stocks are going to benefit most from economic recovery and Fletcher Building is right at the top of the pile," he said.

Fletcher Building was up 1.3% while Telecom slipped 1.9% after the government said it would review funding for the company's delivery of rural services.

In foreign exchange markets, the U.S. dollar was higher against the yen, after stop-loss buy orders were triggered at around Y89.80. Hiroshi Maeba, Senior Dealer at Nomura Securities noted that low U.S. interest rates, repatriation of overseas earnings by Japanese firms before end of fiscal half-year this week could "keep the (dollar's) topside quite heavy."

The dollar was at Y90.09 from Y89.61 in late New York trade, after hitting an eight-month low at Y88.23 on Monday. The euro at Y131.15 from Y130.91 in late New York and $1.4629 from $1.4606.

Japanese government bonds were little changed. "Most market participants will retreat to the sidelines ahead of the semiannual book closing, so we don't expect much to happen in the market," said Mitsubishi UFJ Securities strategist Naomi Hasegawa. "With dollar-yen recovering and the Nikkei in positive territory, that will cap the upside for the JGB market."

The lead December futures contract was last 0.02 lower at 139.29 points while the 10-year yield was down 0.5 basis point at 1.275%.

The London Metals Exchange three-month copper futures contract was down $33 at $5,978 per ton from the London kerb while aluminum was $3 lower at $1,830. Spot gold was trading at $989.70 per troy ounce, down $2.85 from the New York close.

Nymex crude oil futures for November were last 30 cents higher at $67.14 on Globex.

Australian 2008/09 budget underlying cash deficit A$27.1 Bln

Australian 2009 deficit came in at A$27.1 Bln against the May forecast of A$32.1 Bln. Finance Minister, Wayne Swan said he expects the budget to return to surplus as the economy improves. The data has had very little impact onthe local currency.

Japan’s Fujii wont Rule out forex intervention

Hirohisa Fujii, has said that he would not rule out taking action in the FX market if currency moves are abnormal. Fujii also re-iterated his view that global competition to devalue each country's currency would be wrong but that he never said he would leave a strong Yen as it is. It suggests that the DPJ's policy towards the Yen is closer to the LDP's than the market thought. It has led to a bid tone in USDJPY this afternoon and in turn has seen EURJPY demand out of Tokyo provide a base for EURUSD.

Shanghai Index drifts lower before holidays

After opening flat, the Chinese Index has continued its downward path that we have seen over the last few days. Dealers are reporting a directionless day with light volumes ahead of the long holiday. Overall the index has lost about 7% this quarter, with a huge number of new shares and IPO's pushed onto the market. Yangtze Power was in the spot light today, after it announced the completion of a take over of all its parent company's major assets.

Vietnam Sep Coal Output Estimated Up 26% On Yr At 3.285M Tons

HANOI -- Vietnam's September coal production is estimated to have risen by 26% to 3.285 million metric tons, the General Statistics Office said Tuesday.

The country produced 3.936 million tons in August, according to revised GSO data.

In the January-September period, the country produced an estimated 31.974 million tons, up 4.2% compared with the same period last year, the GSO said.

Electricity output in September rose 16% to 6.9 billion kilowatt-hours, the GSO said.

In August, Vietnam produced 7.4 billion kWh of electricity.

In the January-September period, Vietnam produced 59.2 billion kWh, up 11% on year.