The Cable tried to rally from our previous bottom-end support of 1.3683 yesterday, yet failed to close above March 10 lows on the 4 hour. The GBP/USD is heading south Thursday in reaction to alarming industrial production data from Germany and China coupled with a disappointing unemployment claims number from the U. S.

The global economy is still weakening and the optimism from Citi is hardly reflected anywhere else in the market. Britain is already in a tight spot economically having to nationalize Lloyd's Bank and rely upon quantitative.

Hence, the weak economic data is testing the patience of a fundamentally weakened GBP/USD. The Cable appears headed towards 2009 lows again. If U. S. equities can't follow through on their stabilization process, then the 2009 lows could become a distant memory. In fact, if the lows don't hold, then we could see an incredible selloff in the near-term.

However, before we get ahead of ourselves, the Cable still has March lows to count on. We maintain our negative outlook on the GBP/USD for the reasons mentioned above.

Fundamentally, we find resistances of 1.3726, 1.3777, 1.3805, and 1.3844. To the downside, we see supports of 1.3683, 1.3626, 1.3590 and 1.3565. The 1.40 level serves as a psychological barrier to the upside with 1.35 playing as a cushion to the downside. The GBP/USD is currently exchanging at 1.3710.

Copyright 2009 FastBrokers, Latest Forex News and Analysis for Forex, Bullion and Commodity Traders.   

Disclaimer: For information purposes only. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained. There is a substantial risk of loss in trading futures and foreign exchange.