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BOE could cut rates after dollar continues to dominate against Sterling

Mon, Oct 6 2008, 12:11 GMT
by Benny Menashe

Finotec Group Inc.

Fundamental

The pound fell against the dollar amid speculation the Bank of England will cut interest rates this week to bolster an economy that may be in a recession. The British currency also rose to the highest level in seven months against the euro after BNP Paribas SA agreed to take control of Fortis in Belgium and Luxembourg for 14.5 billion euros ($19.7 billion) and the German government, banks and insurers agreed on a 50 billion-euro rescue for Hypo Real Estate Holding AG after an earlier bailout faltered.

Technical

The U.K. currency declined to 1.7587 and we can see the drop of 4 percent. Technically the market trend is still clear downtrend as we can see strong supply in the market, based on technical indicators like RSI, which is in a bearish direction, MACD crosses the signal line and is pointing downwards, and Bollinger gives us a selling signal by closing the candle below the middle band.

GBP/USD (Daily Chart)
The primary tendency is in a clear downtrend.

GBP/USD (4 Hour Chart)
The pair fails to break the channel upper line.

GBP/USD (Hourly Chart)
The Minor trend shows us a break of the support level.

Resistance
1.7875
1.7960

Support
1.7550
1.7450

Published on  Mon, Oct 6 2008, 12:11 GMT

Archive

• BOE could cut rates after dollar continues to dominate against Sterling
  Published On Mon, Oct 6 2008, 12:11 GMT
• Euro hits 10-day low vs dollar as banking crisis spreads
  Published On Wed, Oct 1 2008, 11:42 GMT
• Dollar slips due to failed liquidity plan by Federal Reserve
  Published On Tue, Sep 23 2008, 12:07 GMT
• Lehman bankruptcy helps Euro recuperate!
  Published On Mon, Sep 15 2008, 08:53 GMT
• Nine day decline might get worst for the pound against dollar
  Published On Mon, Sep 8 2008, 12:00 GMT

[ View All ]

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