The Cable is logging some healthy gains after the BOE cut its benchmark rate to record low of 0.50%. The Cable is rising above our 2nd tier downtrend line ahead of the U. S. Unemployment Rate. Despite the progress made in the GBP/USD over the last 24 hours, the debilitating medium-term downtrend line remains intact.

What we are likely seeing here is a situation of oversold conditions and buying on the news. Furthermore, Britain released a better than expected PPI Input number this morning, showing an encouraging rise in inflation.

However, we must not forget the BOE is considering using quantitative easing to rescue the economy since its benchmark interest rate is close to zero. Quantitative easing has not proven successful in the past, and could result in a depreciation of the Pound.

As with the rest of the major Dollar paired currencies, all eyes are on the release of the official U. S. Unemployment Rate. If the number comes in weaker than expected and U. S. equities tumble as a result, we should see the Cable follow suit due to the positive correlation.

Furthermore, while we could see the continuation of near-term gains in the GBP/USD our 3rd tier downtrend line looms in the distance. Fundamentally, we find resistances of 1.4292, 1.4355, 1.4409, and 1.4455.

To the downside, we see supports of 1.4207, 1.4139, 1.4103, and 1.4058. The 1.45 level still serves as a psychological barrier to the upside with 1.40 serving as a cushion to the downside.

The GBP/USD is currently exchanging at 1.4248.

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.