{"id":3879,"date":"2009-09-17T13:46:28","date_gmt":"2009-09-17T18:46:28","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=3879"},"modified":"2009-09-17T13:46:28","modified_gmt":"2009-09-17T18:46:28","slug":"gbpusd-holds-strong-at-1-65","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2009\/09\/17\/gbpusd-holds-strong-at-1-65\/","title":{"rendered":"GBP\/USD Holds Strong at 1.65"},"content":{"rendered":"

By Fast Brokers<\/strong> – The GBP\/USD has managed to fight off the dovish statements from the BoE\u2019s King, stabilizing around the psychological 1.65 level as global equity markets rally.\u00a0 Yesterday we saw large rallies in the EUR\/USD, gold, and U.S. equity markets.\u00a0 The Cable\u2019s positive correlations pulled the currency pair out of its intense pullback.\u00a0 However, there remains a negative drag on the Cable which likely won\u2019t reverse any time soon considering Britain will be very quiet next week on the economic data front.\u00a0 On the other hand, Britain\u2019s pricing and CCC data came in just ahead of expectations this week, helping counteract Governor King\u2019s latest monetary shock.\u00a0 As investors know, King stated the BoE is considering lowering the deposit rate paid on the bank reserves, thereby encouraging lending and increasing liquidity in the monetary system.\u00a0 King\u2019s latest dovish statement follows the BoE\u2019s decision to surprise investors by injecting more funds into its QE package at the last monetary policy meeting.\u00a0 The BoE\u2019s relentless favoritism of liquidity worries investors that Britain\u2019s economy may not be on as solid of footing as we are led to believe by the performance of econ data and equities.\u00a0 King\u2019s dovish attitude is having its intended consequences, holding down the Pound as the Dollar depreciates heavily across the board and gold climbs towards 2008 highs.\u00a0 Therefore, even if current trends continue, the GBP\/USD may only participate half-heartedly since the currency pair has downward inclinations.\u00a0 We would not be surprised to see the GBP\/USD experience further downward pressure over the near-term once investors take profits from risk-oriented investments.<\/p>\n

Meanwhile, the Cable is back above 1.65, a comforting development for bulls.\u00a0 However, the GBP\/USD faces all three of our downtrend lines along with 9\/15 and 9\/11 highs.\u00a0 Our 3rd tier downtrend line serves as a key barometer for a meaningful near-term uptrend in the GBP\/USD since the line connects through August highs.\u00a0 Our 1st tier downtrend and 3rd tier uptrend lines are reaching an inflection point right now, indicating the possibility of heightened volatility in the currency pair over the next 24 hours.\u00a0 A pop to the topside would likely run to our 2nd tier downtrend line whereas a pullback would find support in our 2nd tier uptrend line.\u00a0 The GBP\/USD should take its cue from the broad-based performance of the Dollar and U.S. equities since Britain\u2019s data news wire will be silent next week.\u00a0 We maintain our negative outlook on the GBP\/USD trend-wise and the Pound should continue to underperform for the time being.<\/p>\n

Present Price: 1.6511<\/p>\n

Resistances: 11.6524, 1.6551, 1.6570, 1.6595, 1.6622<\/p>\n

Supports: 1.6495, 1.6475, 1.6455, 1.6431, 1.6402, 1.6382<\/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 GBP\/USD has managed to fight off the dovish statements from the BoE\u2019s King, stabilizing around the psychological 1.65 level as global equity markets rally.\u00a0 Yesterday we saw large rallies in the EUR\/USD, gold, and U.S. equity markets.\u00a0 The Cable\u2019s positive correlations pulled the currency pair out of its intense pullback.\u00a0 … <\/p>\n

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