Usual month end buying in EUR/GBP has put the pound on the back foot this morning, with the cross heading up towards some decent resistance around 0.8880/90. (0.8886 Aug 10 high) Above here there’s a fibo retracement at 0.8916 which is 61.8% of the 0.9084-0.8644 down move.
Recent comments from BOE’s Posen (QE2) and the BIS (UK debt concerns) seems to have left a nasty taste with traders with the quid slipping down towards apparently good bids towards 1.6250. There are large stops below here which could see a further drop to 1.6205/10.
Guess we’ll just have to wait and see but have a sneeking suspicion there’s bad data out later from the US, which may prompt further QE3 banter and weaken the dollar again.
Cables around 1.6270 and the cross at 0.8870..
