After the MPC rate cut the British pound could gain on buying rumors
selling fact ahead of awaited .25% rate cut today. The market is
waiting to look into the Fed's assessments words and what is the
matter right now is it the inflation or the growth. Bernenke has
insured recently the tending to stabilize the market after the housing
and credit storm.
We wait the release of further inflation rates this week from US and
this can help clear the market view. Recently there were good jobs
data in the recent 2 months and in the last fed's meeting the words
were declaring the fed's needs to wait and watch till the end of this
year but signs of growth and consuming slow down have increased the
market expectation of another .25% cut today.
The pound could find a room to correct technically its rally to 2.116
in the last 2 weeks to 2.017 pressured by a lower high at 2.084. The
downside risk can increase as long as we are still lower than this
level and 2.069. The trend line extension from 2.116 to 2.084 is still
well above us. The new target can be 1.99.
The need for a break over 2.062 is essential to overcome this emerging
down side pressure and to break the trend line shortly. Gaining upside
momentum can not be by breaking 2.084.
The gold rates can keep its gain as the prospects of cutting interest
rates are still ahead in spite of the oil prices easing. The upside
inflation risk resulted in these cuts underpins its rate specially as
there is doubts of the effect of these cuts which can cause a
stagflation case which can paint a brighter picture of the precious
metal..
Best wishes
FX Consultant
Walid Salah El Din
E-Mail: mail@[EMAIL PROTECTED]
