The Cable found some support around the psychological 1.40 area as expected despite the large selloff taking place in U. S. equities. However, the Cable failed to close above our 1st tier downtrend line and will likely extend its losses with a possible retest of January lows coming.

The GBP/USD is weakening Tuesday after Britain released a much worse than expected Construction PMI. Therefore, with Net Lending to Individuals and Mortgage Approvals each declining yesterday, the housing crisis in Britain is ongoing.

Meanwhile, the S&P futures are in a freefall after dropping below 2008 lows. Considering the positive correlation between the Cable and U. S. equities, we maintain our negative outlook on the GBP/USD. Fundamentally, we maintain our resistances of 1.4078, 1.4119, 1.4173, and 1.4219.

To the downside, we hold our supports of 1.4023, 1.3964, 1.3905, and 1.3841. 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 1.4059.

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