{"id":5454,"date":"2009-12-22T10:33:50","date_gmt":"2009-12-22T15:33:50","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=5454"},"modified":"2009-12-22T10:33:50","modified_gmt":"2009-12-22T15:33:50","slug":"gbpusd-drops-beneath-1-60","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2009\/12\/22\/gbpusd-drops-beneath-1-60\/","title":{"rendered":"GBP\/USD Drops Beneath 1.60"},"content":{"rendered":"

By Fast Brokers<\/strong> – The Cable has dropped below our 2nd tier uptrend line and the psychological 1.60 level as the Dollar strengthens across the board.\u00a0 We recognize solid gains in the USD\/JPY coupled with weakness in the gold, indicating investors continue to favor the Greenback in light of America\u2019s economic recovery picking up steam.\u00a0 The UK released Final GDP data which printed one basis point higher than Prelim, yet one basis point below analyst expectations.\u00a0 However, the more important data figure was Britain\u2019s Current Account Balance, which came in much stronger than anticipated.\u00a0 Hence, it seems global demand for UK goods and services is improving, a positive signal for the economy.\u00a0 While some may expect relative strength in the Pound in reaction to healthy Current Account data, we\u2019re witnessing exactly the opposite since it seems America\u2019s recovery story is in the forefront right now.\u00a0 Furthermore, it may be deduced that part of the reason behind today\u2019s narrowing in the Current Account Balance likely comes from recent weak UK consumption data.\u00a0 Meanwhile, investors will likely have their attention focused on Wednesday\u2019s BoE monetary policy meeting minutes.\u00a0 Due to recent improvements in unemployment and prices, the BoE may deem it appropriate to exert a more hawkish tone in its monetary policy statement.\u00a0 Hence, volatility in the Cable could pick up a bit before Christmas as investors react to the BoE\u2019s decision.\u00a0 For the time being, investors should monitor the Dollar\u2019s broad-based reaction to upcoming Final GDP and Existing Home Sales from the U.S. since the Cable will likely correlate well with the Dollar until tomorrow\u2019s BoE meeting.<\/p>\n

Technically speaking, the Cable\u2019s large pullback this month has sent the currency pair below some key technical levels.\u00a0 Hence, it\u2019s possible the Cable could be entering a more protracted downturn.\u00a0 The Cable has now dropped below our 2nd tier uptrend line with our 1st tier uptrend waiting far below (Off Chart).\u00a0 That being said, the fact we are now using March lows, or the 1.40 area, to create uptrend lines gives investors an idea of the extent of the damage inflicted by the Cable\u2019s December pullback.\u00a0 Meanwhile, it will be interesting to see if the Cable can stabilize today and stick around the psychological 1.60 level.\u00a0 If not, the Cable does have some technical supports in the form of September and October lows.\u00a0 As for the topside, the Cable faces multiple downtrend lines along with 12\/18 and 12\/16 highs.<\/p>\n

Present Price: 1.5990<\/p>\n

Resistances: 1.6005, 1.6023, 1.6045, 1.6071, 1.6096, 1.6132<\/p>\n

Supports: 1.5972, 1.5948, 1.5917, 1.5899, 1.5875, 1.5845<\/p>\n

Psychological: 1.60, 1.65, September and October lows<\/p>\n

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

Market Commentary<\/strong><\/em> provided by Fast Brokers<\/strong>.<\/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 has dropped below our 2nd tier uptrend line and the psychological 1.60 level as the Dollar strengthens across the board.\u00a0 We recognize solid gains in the USD\/JPY coupled with weakness in the gold, indicating investors continue to favor the Greenback in light of America\u2019s economic recovery picking up steam.\u00a0 … <\/p>\n

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