Sterling did produce a correction rally last week as $GBPUSD made a high at 1.5200, $GBPAUD as high as 1.4850; $GBPNZD as high as 1.8350; $GBPCAD as high as 1.5650; and $EURGBP as low as 0.8590. These rallies, for the most part, kept GBP below previous long term lows. This technical development was certainly the case for the $GBPUSD, $EURGBP, and $GBPNZD where all pairs have broken long term support levels. While the BoE did not move on additional QE, the surprising development of the week was the BoE’s possible change to a dual mandate to combat both inflation and unemployment. With this new trading week very light out of the UK, expect sterling price to continue to weaken across the board. While US news and the RBNZ rate decision will influence those respective currency pairs, the protocol with sterling is clearly to sell the rallies.
- Mark Carney could be handed powers to spur economy (The Telegraph)
- That’s the 7th straight week futures traders have added to their GBPUSD shorts (StockTwits) [chart]
- Draghi/King Boost EUR/GBP (City Index)
- Blast From The Past As Cable Plunges To Seven Month Low (Zero Hedge)
- Wall Street’s Brightest Minds Reveal The Charts That Worry Them Most (Business Insider) [charts on GBP and copper most interesting]
- Knives out for George Osborne as report says austerity stunting growth (The Guardian)
- Where next for the euro? (FT)