GBP/USD Analysis:
With Euro and UK under strikes and walkout, recover of the economy is seriously in question. Added to the woes are reports of stagnant consumer spending and confidence.
Before Fed chairman spoke, pound was hovering between 1.548 and 1.540. The U.S. Dollar regained most of its mid-session loss to finish only slightly worse than Tuesday. Comments from Fed Chairman Bernanke triggered an early session break after he reiterated the Fed’s stance that interest rates would remain low for an “extended period”.
Yesterday Analysis: Indeed, the pound range within 1.540 and 1.548 before US trading. It attempted EMA100 and EMA200 but failed. During US trading, it finally break support at 1.540.
Today expectation: Support at critical level at 1.535 / 1.530. If broken, expect the pound to hit a new low at 1.505!
Of course the resistance is at 1.545/ 1.550 (1 hour chart EMA100 /EMA200 )
The news in the afternooon is not so pleasing to either the Euro or the pound. German Unemployment Change: Published on Thursday at 1655 SGT. After 6 straight months of drop in unemployment, a rise of 6000 people was seen last month. This negative will probably be continued with another rise – 18,000 this time. Yet another weak figure from this big country, which nicely fits into the double-digit European unemployment rate.
At 1700hrs SGT BOE Gov King Speaks. With the economy barely crawling out of recession, a rapid fiscal retrenchment would be treated to a "savage" reaction in foreign exchange markets.With confidence in British policymaking gone, the pound would risk plunging to 1.50 against the dollar.
Therfore, I am not expecting the pound to do well today and may test new low at 1.535/30 region.
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