Since failing to overcome the 1.9750 resistance point earlier this week, GBP/USD has shed over 61.8% of its rise from 1.9260. Trendline support at 1.9545 was snappedin the process and the pound looks set for lower levels once it consolidates some of today's big losses.
The lack of a February rate hike from the MPC has been a big catalyst for weakness this weeks as has M&A flows out of the UK as British corporates take advantage of the lofty pound to launch cash bids for overseas assets.
The latest was today's nearly GBP2 bln takeover of US bus operator Laidlaw by a UK firm. Offers are seen between 1.9500 and 1.9520 near-term on rebounds with more toward1.9545/50. Support comes in at 1.9455/60 and 1.9425. Cable trades now at 1.9482.
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