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GBP/USD Daily Commentary for 2.26.09

Discussion in 'Forex Daily News & Outlook' started by FastBrokers, Feb 27, 2009.

  1. FastBrokers

    FastBrokers New Member

    Feb 23, 2009
    Likes Received:
    Los Angeles
    The Cable sold off sharply on Wednesday, following their positive correlation with U.S. equities. On a positive note, the Cable still has found support on the 12/12-12/20 trading base, and is currently strengthening from our 1st tier downtrend line. Whether the base holds will likely depend on the upcoming economic data coming from the U.S. today. If the data is worse than expected, the S&P futures could decline, sinking the Cable with them. However, we foresee a retest of our 2nd tier downtrend line in the near term with U.S. equities pointing positive in the pre-market. If the Cable should fall below the 12/12-12/20 trading base, we could see a heightened selloff with a possible retest of January lows. Britain’s Nationwide HPI showed a greater decline than analyst expectations this morning. Therefore, Britain’s house prices are falling in lockstep with that of the U.S. Since the global recession began with the crumbling housing market, these data points prove very negative. Meanwhile, BOE Governor King will address the public today and investors will see if he hints at any future monetary policy. Fundamentally, our 1.4328 and 1.4392 supports turn resistance while we hold our resistances of 1.4505 and 1.4569. To the downside, we maintain our supports of 1.4242 and 1.4142 with fresh supports of 1.4069 and 1.3973. The 1.45 level still serves as a psychological barrier to the upside with 1.40 serving as a cushion to the downside. The GBP/USD is currently exchanging at 1.4269.

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