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Forex: GBP/USD: Pound's rally might be capped at 1.6675/1.6745 band - Commerzbank

Fri, Nov 6 2009, 08:13 GMT
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FXstreet.com (Barcelona) - The Pound remains heading north on a strong pace, reaching levels above 1.6600, after soaring 300 pips from Tuesday's low at 1.6260, approaching Oct 23 high at 1.6695, which, according to Karen Jones, technical analyst at Commerzbank, might cap Pound's rally.

The area between 1.6675/1.6745 has proved an strong short-term ceiling, according to Jones: "We look for further probes into the 1.6675/1.6745 band to be limited, this has provoked failure on numerous occasions and it has proved to be an effective short term ceiling. We again look for the near term rally to fail and sell off to the 1.6282/00 support."

Resistance levels, according to Jones, lie at 1.6633, 1.6680/94 and 1.6745/65. On the downside, support levels lie at 1.6555, 1.6465/50 and 1.6281.

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Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.

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