{"id":3416,"date":"2009-08-20T11:22:10","date_gmt":"2009-08-20T16:22:10","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=3416"},"modified":"2009-08-20T11:22:10","modified_gmt":"2009-08-20T16:22:10","slug":"gbpusd-sags-amid-concerns-surrounding-britains-budget","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2009\/08\/20\/gbpusd-sags-amid-concerns-surrounding-britains-budget\/","title":{"rendered":"GBP\/USD Sags Amid Concerns Surrounding Britain\u2019s Budget"},"content":{"rendered":"

By Fast Brokers<\/strong> – The Cable is retreating from yesterday\u2019s pop after Public Net Sector Borrowing came in much higher than analyst expectations.\u00a0 Today\u2019s unsettling debt-related data comes after BOE Minutes revealed King voted to increase QE by 75 billion rather than the 50 billion passed by the central bank.\u00a0 We were a bit shocked by King\u2019s proposal considering most British data has been outperforming expectations.\u00a0 In fact, we were surprised the BOE decided to inject more liquidity in the first place.\u00a0 The development is unsettling Pound traders as uncertainty rises regarding the BOE\u2019s future monetary policy.\u00a0 We believe King may fear the Pound is overheating from previous investor optimism.\u00a0 The faster the Pound appreciates, the less attractive British services become to foreign countries.\u00a0 Hence, King may be trying to give Britain\u2019s economy a little more breathing room as it attempts to recover from a historic downturn.<\/p>\n

Speaking of recent improvements in Britain\u2019s data, Retail Sales came in a basis point ahead of analyst expectations today.\u00a0 Furthermore, Britain\u2019s CPI and RPI outperformed earlier this week.\u00a0 As a result, the fundamentals are telling a more positive story than what investors are interpreting from King\u2019s vote at the BOE meeting.\u00a0 With Britain\u2019s data finished for the week, the GBP\/USD\u2019s immediate-term movement should be highly dependent on the performance of U.S. equities coupled with the EU\u2019s slew of PMI data on Friday.\u00a0 Though we\u2019ve seen the Cable\u2019s correlation with U.S. equities flip-flop this month, we expect the positive correlation should play out until further notice.<\/p>\n

Technically speaking, both the Cable and the EUR\/USD failed to tackle their respective August 13th highs yesterday as the currency pair\u2019s didn\u2019t receive enough buy-side interest to power through.\u00a0 Hence, our 3rd tier downtrend line and August 13th highs continue to play an important role to the upside.\u00a0 Meanwhile, the GBP\/USD\u2019s gravitation towards the 1.65 area continues.\u00a0 This psychological zone is turning out to be as strong as we anticipated, and the currency pair will likely need an upward movement with conviction to leave 1.65 in the rearview.\u00a0 As for the downside, the Cable has Wednesday lows, our 1st tier uptrend line, and August 17th lows to fall back on.\u00a0 Investors should also note our 1st tier uptrend line is reaching an inflection point with our 2nd tier downtrend line, signaling the possibility of heightened near-term volatility.<\/p>\n

Present Price: 1.6471<\/p>\n

Resistances: 1.6482, 1.6512, 1.6544, 1.6569, 1.6608<\/p>\n

Supports: 1.6455, 1.6428, 1.6398, 1.6376, 1.6346<\/p>\n

Psychological: 1.65<\/p>\n

\"\"<\/a><\/p>\n

Market Commentary<\/strong><\/em> provided by Fast Brokers<\/strong><\/span><\/a>.<\/p>\n

Disclaimer:<\/strong> FastBrokers\u2019 market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell\/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.<\/p>\n

Risk Disclosure:<\/strong> There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Fast Brokers – The Cable is retreating from yesterday\u2019s pop after Public Net Sector Borrowing came in much higher than analyst expectations.\u00a0 Today\u2019s unsettling debt-related data comes after BOE Minutes revealed King voted to increase QE by 75 billion rather than the 50 billion passed by the central bank.\u00a0 We were a bit shocked … <\/p>\n

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