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GBP/USD Near Support Level
By Benny Nardino | May 13, 2008
GBP/USD is marching slowly but surely towards support levels of 1.9100/9300 we drew a few months back in January. Many had argued on the possibilities when the pair was still trading at 1.9900. Were you one of the “doubting Thomases”?
We have since written a few articles that support our position on this analysis considering recent data and Bank of England’s present economic stance. Yesterday also saw a significant shift from the MPC people - a rise in interest rate with food prices soaring to record highs. Using this as a yardstick, the Government’s recent measures may take months to alley fears of the economic woes and looming recession in the UK.
For the interim period, cable GBP/USD has to rely on the vulnerability and weakness of other pairs and crossing currencies for any upward tracking climbs. The spike in oil prices has also exacerbated things from many angles.
For now, we still maintain our position. That is anticipating a dripping channel to our support line drawn in the sand - a support of 1.9300 region.
However, we are most likely to see the pair vacillate along the Fibonacci level of 23.6%. This could take weeks and months to playout as eventually. Have a great day.
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May 13th, 2008 at 23:00
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