GBP/USD has pulled out of its post-BOE slide, but bounces have been modest. Speculation of a quick hike at today"s meeting made the rounds yesterday but was not carried out and the pound has underperformed across the board ever since. GBP/JPY has been a particular victim as the JPY rebounds in the hopes of a Japanese hike before year-end and on comments from Trichet indicating a stronger JPY is justified by the fundamentals, a reiteration of his mi-September comments after the G7
meeting in Singapore.
Good support for cable is at 1.8750 now on dips. 1.8785 is resistance now on rebounds as the pound tries to work off intraday oversold conditions. GBP/JPY trendline support is eyed at 220.65, an area probed earlier. A close below would be bearish in the medium-term.
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