{"id":7213,"date":"2010-03-01T12:08:58","date_gmt":"2010-03-01T17:08:58","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=7213"},"modified":"2010-03-01T12:08:58","modified_gmt":"2010-03-01T17:08:58","slug":"gbpusd-dives-lower-after-election-poll","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/03\/01\/gbpusd-dives-lower-after-election-poll\/","title":{"rendered":"GBP\/USD Dives Lower After Election Poll"},"content":{"rendered":"

The Cable has crumbled below its highly psychological 1.50 level and has undergone a huge selloff after a poll this weekend showed that the UK election is nearly a dead heat.\u00a0 Investors are worried that a balanced parliament may not be able to tackle the fiscal and economic situations facing the UK.\u00a0 This uncertainty drove the Cable lower and the Pound is clearly experiencing a relative weakness due to a surge in the EUR\/GBP.\u00a0 The Cable is now recovering from intraday lows even though the psychological blow has been dealt.\u00a0 Investors clearly fear that debt issues in the EU \"\"<\/a>could show up in the UK and the Pound is getting punished in succession.\u00a0 On the bright side, the UK\u2019s Manufacturing PMI printed slightly above analyst expectations and Net Lending to Individuals registered a surprising pop.\u00a0 The increase in net lending is a very welcome development since the BoE has been harping on the banks to lend out some of their cheap liquidity to individuals in order to jumpstart the UK economy.\u00a0 Hence, today\u2019s trading session does carry a silver lining.\u00a0 Meanwhile, investors are waiting on America\u2019s Manufacturing PMI.\u00a0 Should the U.S. number print weaker than expected, investors may continue to keep the Cable above intraday lows due to relative economic weakness in America.\u00a0 However, a strong data point could place further downward pressure on the Cable for the opposite reason.\u00a0\u00a0 Activity will only head up as the trading week progresses.\u00a0 The RBA will make its rate decision tomorrow and the UK will release its Halifax HPI and Construction PMI data.\u00a0 Should the RBA hike its benchmark rate, this could help the risk trade across the board in anticipation of an improving global economic landscape.\u00a0 However, inaction or a cut by the RBA could yield the opposite.<\/p>\n

Technically speaking, we\u2019ve formed some new uptrend lines for the Cable to compensate for today\u2019s selloff.\u00a0 Our uptrend lines run through 4\/30\/2009 levels, or the 1.47-1.48 area.\u00a0 Hence, the Cable could continue to have support around this area over the near-term.\u00a0 Meanwhile, it will be interesting to see whether the currency pair can manage to climb back towards its highly psychological 1.50 level, now serving as a technical barrier.\u00a0 As for the topside, the Cable faces multiple downtrend lines and has an uphill battle.<\/p>\n

Present Price: 1.4931<\/p>\n

Resistances: 1.4942, 1.4974, 1.4997, 1.5038, 1.5071, 1.5112<\/p>\n

Supports: 1.4877, 1.4850, 1.4822, 1.4799, 1.4767<\/p>\n

Psychological: 1.50<\/p>\n

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

(click to enlarge)<\/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":"

The Cable has crumbled below its highly psychological 1.50 level and has undergone a huge selloff after a poll this weekend showed that the UK election is nearly a dead heat.\u00a0 Investors are worried that a balanced parliament may not be able to tackle the fiscal and economic situations facing the UK.\u00a0 This uncertainty drove … <\/p>\n

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