Rate rallies a full handle to breach new highs but volumes light; could be a head fake. Sell signal negated just as the resting order gets filled; expect volatility. Bids around the 1.9660 area from “large names” cushioned the break; short-covering likely igniting the rally.
Traders expect GBP to track EURO this week. Traders now expect a top to form as the rate had thinner volume on the rally into the reported option defense last week and early this week. Rate fails at high prints near previous resistance so a correction is still developing.
Spillover weakness/strength from EURO still likely all week this week. Continue to expect a lot of cross-trading. G-8 data may create some whipsaw again. Today’s US data likely no factor.
Resistance 3: 1.9900
Resistance 2: 1.9850
Resistance 1: 1.9820
Latest New York: 1.9805
Support 1: 1.9750
Support 2: 1.9690/1.9700
Support 3: 1.9650
Data due Thursday: All times EASTERN (-5 GMT)
Tentative GBP MPC Rate Statement
7:00am GBP Official Bank Rate
Forex Analysis by Jason Alan Jankovsky at ForexPros.com. For more details about Forex Trading and Tips for decent earnings through Forex Trading, Please check http://www.forexpros.com