Forex Depth Analysis: GBP/USD

Momentum holds U.S. dollar while sterling looks to recover

The BoE MPC meeting that ends today, is expected to culminate in the decision to lower the official Bank Rate, perhaps for the final time, by 50bps, to 0.5%, from 1.0% currently. However, alongside this we expect to see the BoE announce plans to shift to quantitative easing (QE). An exchange of letters between BoE Governor King and Chancellor Darling, will be published alongside the BoE statement today. However, by how much will the BoE expand its balance sheet to finance its purchases of private sector assets and govt debt? Please see our in-depth pages for further analysis.

Trading Tactics

Buy GBP/USD on sign of a break downtrend line.

The buying point is at 1.4177; Fibonacci 61.8% is the take profit at 1.4350;

Previous support is the stop loss at 1.3960

The selling point is at 1.3940; previous support is the take profit at 1.3610;

Pivot point is the stop loss at 1.4040

Technical: Sterling breaks previous resistance and continues its uptrend. A move back higher could set up a test of 1.4350

The following analysis is for information only; Finotec is not responsible for any decisions or misinterpretations based on the given text.

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