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Forex: GBP/USD bounces at 1.4870 and reaches 1.4940

Wed, Mar 10 2010, 11:44 GMT
http://www.fxstreet.com

FXstreet.com (Barcelona) - The Pound is gathering upside momentum after plunge to one-week low at 1.4870, weighed by an unexpected decline on UK manufacturing output, and the pair has taken back about 70 pips to reach 1.4940 area.

On the upside, the pair might find resistance at 1.4950/60 (intra-day supp/resistance area), and above here, 1.5015 (session high) and 1.5070/85 (intra-day resistances). On the downside, support levels lie at 1.4970 (session low), and below here, 1.4850 (Mar 2 low), and 1.4780 (Mar 1 low).

According to Valeria Bednarik, technical analyst at FXstreet.com, current recovery will remain capped at 1.4940/60: "Hourly charts show some upside corrective movement developing, yet 1.4940/60 area should limit rally and generate a downside rebound. Clearly above 1.4970, pair could attempt to regain 1.5020 area."

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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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