Forex: GBP/USD breaks 1.5960 and prints 1.5990 as daily high


FXstreet.com (Barcelona) – The Sterling's recovery against the Dollar from 1.5830 in the European session has continued after the US opening bell to break 1.5910 previous resistance and MA55 periods in the 60 minutes chart at 1.5960 to reach fresh intra-day high at 1.5990.

Currently the pair is trading around 1.5960/70, rising 0.40% so far today from opening price action at 1.5900. According to Andrew Wilkinson, analyst in Interactive Brokers, Gordon Brown, Prime Minister in UK, has undermined the pound with his recent speech.

Wilkinson comments: “But in his New Year’s message to Great Britain Prime Minister Gordon Brown issued the same message to the nation when he referred to “a still fragile” recovery that “needs to be nurtured.” He told Britons he had a blunt message: “Don’t wreck the recovery.” The pound is fast losing friends into the end of the year.”

Wilkinson concludes: “The pound is lower against the dollar at $1.5871 having breached $1.6000 just yesterday. Mr. Brown would do well to loosen his necktie and raise a dram to the future of the British economy over hogmanay rather than beating his chest. There are possibly plenty more people who’d rather do that for him. Perhaps he’s still in that mood where he’d rather see a lower pound for the sake of aiding exporters. However, I doubt it after the irritation expressed at a northern newspaper for reporting the Prime Minister’s comments to fit the story.”

On the Technical view, Valeria Bednarik, FXstreet.com collaborator, affirms: “Rebounding strongly to the upside after the release of an U.K. hostage in Iraq, pair is practically at past Asian session opening level. Hourly charts seem slightly bullish at this point, thus 1.5920 resistance area remains key level to watch: only a break and confirmation above that level, will open doors for further rises in the pair, while back under 1.5870 area will deny further rises and send the pair back to test daily lows around 1.4830.”

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