GBP/USD (a 4-hour chart)
GBP is the most intriguing currency now after closing the last week below the rising trend line from 2009 and 2010. Our long-term goal is 1.4000 in the 2nd quarter of 2013 is still possible, especially if the U.S. economy continues its improving.
The British Pound was down from January 2, when it reached 1.6369, its highest level since August 2011. On Tuesday, the pound fell in EBS to its lowest level since July 1.5415.
Fears that tighter fiscal policy will continue to put pressure on the economy negatively affects on the British currency. Concerns of possible downgrade of the UK credit rating and the assumption that the next head of the Bank of England will announce the implementation Carney milder policy than that which supports the current Managing King. UK authorities may welcome drop pounds if it will strengthen the competitiveness of British exports.
Last week, King said that the weakening of the pound is necessary to reduce the deficit of foreign trade in the UK. "From a technical point of view, the pound is extremely oversold, but it was so weak that I would not rule out a further fall to new lows below the low of last June 1.5268 dollar," - says George T. Dowd, a senior currency trader at Newedge.
Today investors will be watching the Bank of England protocols for any indication that he was considering rate cuts to stimulate the UK economy is experiencing problems.