2 Mar 2010

GBP/USD Analysis:
The pound fell by almost 300 pips, hitting low at 1.48, before regaining back to 1.500. Now it stand at 1.49 for the first time in nearly a year amid fears that Britain will be left with a weak government unable to cut spending and balance the budget.

Fears that no party would gain an overall Commons majority led to warnings that the pound was “staring into the abyss” and would fall further still.

The new support is 1.452, another 300 pips down. Today, given at 1730 UK Construction PMI, contrary to the prices of homes and PMI in manufacturing, purchasing managers in the construction sector are still pessimistic. The figure is expected to edge up from 48.6 to 48.9 points, still under 50. This may be a trigger point for pound to sink further.

Resistance is at 1.498 then 1.506.

Yesterday expectation: The pound hit and sank below 1.500.

Today expectation: Price range to hover between 1.485 and 1.495, till Europe news are release which may sent the pound further to the next level of support at around 1.47/1.46