QUOTE(Optiplex330 @ Sep 25 2010, 11:32 PM)
Based purely on Technical Analysis, it says GBP is not likely to surpass +/- RM7. And if you care to look at that TA chart, it has be exceedingly accurate because once it reaches that RM7 region in 1998, 2004 and 2007, it falls back. You could not get more accurate than that.
Now bearing in mind that chart is a highly compressed chart so you can't see the detail. But if you search for details elsewhere, it says there is a strong support at 5.00 +/- in 2002. So it is of no surprise GBP has dropped from RM7 and hover around RM5 for quite sometime in 2009/2010. TA theory says that once it reaches the RM5 support line, there is likely to be a rebound and that is exactly what happened when it bounds from RM5 to RM5.80 earlier this year.
But now that RM5 trendline has been broken, that same RM5 trendline is now the new resistance. That is why you have been seeing it hovering just below RM5 for the past week or months and having a hard time to break above it. So yet again, TA is pretty accurate, wouldn't you say?
But then again, my TA skill are pretty limited but even then, I can see some of the major prediction of TA coming true.
you don't need ta for that.....a currency cannot appreciate too high, not will it slump too low (unless you are a basket case like zimbabwe), and the natural forces of cost and trading come in.....i can tell you the gbp will not go far beyond 7, nor will it go below 4.........barring the collapse of either the msian or british economy.....
the question is where the direction of the currency will go at any time, and that is impossible to predict with any accuracy.......i can say it will be between 4 and 7, but that is not helpful in real life decision making.....