GBP/USD Analysis:
After it refuse to head below 1.668, the pound managed to gain new highs at 1.688. With Fed not willing to raise rates and MPC man Andrew said that UK recession is over, there are more reasons for the pound to head stronger.
In fact, while waiting for the CCI to hit below 0, it did a reversal and now it is heading in the up direction.
Support lies at 1.668 region, which used to be a strong resistance.
Resistance has shifted to 1.698 and 1.704 region.
There is UK Inflation letter at around 1800hrs SGT. This event will complete the inflation releases. It will only be published if the inflation target is missed – CPI falls below 1% in this case. If this happens, Mervyn King will publish a public letter to explain the reasons for this, and especially the things he’ll do to tackle it. This could mean more Pound printing.
Also look out during US trading time on core PPI to be released at 2130hrs SGT.
Trading plan suggestion: Place long trade at around support level and take profit around resistance level.
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