15, May 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

The pair yesterday continued moving to a south direction within the limits of the uptrend. Investors do not see a foundation that could support the pair, so the pair is likely to be traded within 1.53-54 levels, a decline to 1.5200 is still possible. We expect a correction the other day.

We wait for a Bank of England Inflation Report this week.

The British pound suddenly fell last week, GBPUSD, fell below 1.5383.

Although the GBP/USD broke through the support line, in the previous week, we see that the pair is hold above 1.5260, and Sterling may continue to recoup the losses which he got earlier this year.

Indeed, the Bank of England may raise its fundamental assessment for the UK as the economy has avoided a triple recession and we can see that the central bank will lower rates to increase quantitative easing and will extend the Scheme for Financing Loan for another 12 months.

The Relative Strength Index on the GBP/USD is unable to maintain the downward trend carried over from March, we can see that the pair will continue to be consolidated before a quarterly update, but the pair could still fall back to 50.0% retracement around 1.5260 as it seeks support.