GBP/USD Analysis:
With MPC (Monetary Policy Committee)of UK, all nine policymakers also voted to hold interest rates at 0.5pc and did not think there had been enough major economic developments to warrant any change to the £50m expansion of quantitative easing agreed in August. This means good news which means to stop printing more pound to sustain the economic developments. The pound climbed as a result by failed to break 1.644.
In the evening, the Fed made in its FOMC meeting that rates will remain, stating that the economy is doing well. The Fed repeated that it "continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period." This caused a reversal and strenghtened the USD.
This evening at 2200hrs SGT, US Homes Sale and orders for long- lasting goods probably rose in August, extending gains that have signaled the U.S. is emerging from the worst recession since the 1930s.
On the technical anaylsis, the pound has not been able to come out of its 1.64-1.644 resistance barrier. It is now constaint within the daily EMA100 and EMA55, within 1.63 and 1.64.
Will then the evening news or any technical movement break either below 1.627 or break above 1.644?
Trend: A likely scenario will be a range trading in the morning and early after with the band 1.632 and 1.640, with the news from MPC and Fed making no change to their rates. So it will be good to catch a long at 1.632 or a short at 1.64. But once the breakout occur and it is not in favour of your position, its good to close the trade.
Breaking 1.644 will meands pound has the potential to go to 1.65, while breaking below 1.627 will send the pound back to 1.616.
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