{"id":4405,"date":"2009-10-23T11:22:27","date_gmt":"2009-10-23T16:22:27","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=4405"},"modified":"2009-10-23T11:22:27","modified_gmt":"2009-10-23T16:22:27","slug":"gbpusd-plummets-following-surprise-prelim-gdp-data","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2009\/10\/23\/gbpusd-plummets-following-surprise-prelim-gdp-data\/","title":{"rendered":"GBP\/USD Plummets Following Surprise Prelim GDP Data"},"content":{"rendered":"

By Fast Brokers <\/strong>– Most of the Cable\u2019s positive technicals were shattered after Britain\u2019s Prelim GDP number shocked investors by printing negative at -0.4% vs 0.2%E.\u00a0\u00a0 Investors sent the GBP\/USD tumbling on strong volume since all of the positive fundamentals from the past two weeks have now been brought into question.\u00a0 Furthermore, investors are now speculating that the BoE will inject more liquidity into its QE package to keep Britain\u2019s economy afloat.\u00a0 This is a complete reversal from recent optimism surrounding King and the BoE\u2019s less hawkish quotes as of late.\u00a0 After all, the last Services PMI number came in strong and the CCC continues to drop.\u00a0 Considering the services industry comprises nearly 70% of Britain\u2019s economy, investors are hopeful the PMI number signifies future strength.\u00a0 Regardless, The BoE\u2019s upcoming monetary policy became even cloudier, and the uncertainty is likely to riddle the Pound until we hear something from Governor King or another high ranking member.<\/p>\n

In all, we wonder whether the BoE is playing games with investor mindsets to keep the GBP\/USD around par as the global economy repairs itself.\u00a0 We can\u2019t help but notice that despite all of the volatility over the past few months, the Cable is now trading at June 1st levels.\u00a0 Therefore, while China steadfastly keeps the RMB pegged to the Dollar, the BoE appears to be accomplishing this feat via strategic psychological games coupled with intermittent liquidity measures.\u00a0 It\u2019s hard to believe that King and the BoE didn\u2019t see this Prelim GDP number coming when it began shifting towards a more hawkish monetary stance over the past 10 days, sending the Cable flying higher by 1000 basis points.\u00a0 The BoE\u2019s recent comments have allowed today\u2019s negative shock to leave the Cable in a much more favorable technical position than if they had kept quiet.\u00a0 Therefore, investors should look behind future BoE quotes instead of just taking them at face value.\u00a0 In fact, future comments may even give us hints in regards to upcoming econ data releases\u2026<\/p>\n

Meanwhile, the Cable has collapsed below the psychological 1.65 level along with our 3rd and 4th tier uptrend lines.\u00a0 The Pounds relative weakness is highlighted by a solid pop in the EUR\/GBP.\u00a0 Speaking of which, the EU\u2019s PMI data came in positively mixed.\u00a0 Additionally, U.S. Q3 earnings continue to roll in better than expected and Existed Home Sales surged.\u00a0 Regardless of positive developments in the EU and U.S., today\u2019s collapse in the Cable could carry lasting consequences trend-wise.\u00a0 It will be important for the GBP\/USD to hold above our 2nd tier uptrend line and 10\/19 lows.\u00a0 Fortunately for bulls, investors will be greeted by more important econ data early next week, beginning with Nationwide HPI and CBI Realized Sales from Britain.\u00a0 Positive econ reports might help the Cable find a bottom and stabilize.\u00a0 However, any further fundamental weakness will make a BoE liquidity injection all the more likely.\u00a0 As for the topside, the Cable suddenly faces multiple uptrend lines and the 1.65 will act as a topside psychological barrier.\u00a0 Our 2nd tier downtrend line serves an important role once again in terms a substantial turnaround in the Cable.\u00a0 Overall, we suggest investors sit on the sidelines before determining just how serious today\u2019s pullback may be in regards to near and medium-term trends.<\/p>\n

Present Price: 1.6337<\/p>\n

Resistances: 1.6377, 1.6413, 1.6443, 1.6465, 1.6493, 1.6522<\/p>\n

Supports: 1.6329. 1.6303, 1.6265, 1.6227, 1.6205, 1.6185, 1.6151<\/p>\n

Psychological: 1.65, 1.60<\/p>\n

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

Market Commentary<\/strong><\/em> provided by Fast Brokers<\/strong><\/span><\/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 – Most of the Cable\u2019s positive technicals were shattered after Britain\u2019s Prelim GDP number shocked investors by printing negative at -0.4% vs 0.2%E.\u00a0\u00a0 Investors sent the GBP\/USD tumbling on strong volume since all of the positive fundamentals from the past two weeks have now been brought into question.\u00a0 Furthermore, investors are now … <\/p>\n

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