GBP/USD - 2.0211...Although cable fell sharply last week initially due to active cross selling in sterling following U.K. lender Northern Rock's financial woes, the British pound was able to rebound strongly fm there after the Fed cut interest rates by more than expected n also as global stock markets stabilised, leading to renewed carry trade accumulation such as in gbp/jpy.

Sterling's rise fm last week's low at 1.9880 suggests the decline fm 2.0366 (Sep 12) has ended there n abv 2.0273 (80.9% r of 2.0366-1.9880) wud lend credence to this view, bring resumption of the upmove fm 1.9653 (Aug '07 low) for re-test of said res n then twds 2.0463 (Aug 4 high). Abv said latter res is needed to signal MT uptrend has resumed n yield eventual gain twds July '07 top at 2.0656. On the downside, below 2.0076/80 wud 'prolong' choppy trading n risk weakness to 2.0000 but only break of 1.9951 wud yield another fall twd 1.9880.

Today, buying cable on pullback in anticipation of one more rise is still recommended but profit shud be taken on upmove as o/bot condition wud cap price below 2.0300. Below 2.0105/10 wud risk correction twds 2.0076/80 1st...

Source: http://www.forexfactory.com


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