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Finotec News Archive - March 02 2010

USD takes full advantage of worn-out British pound

The pound dropped for a sixth day versus the dollar amid concerns political uncertainties will hamper efforts to reduce the U.K.’s debt.

Anthony Boyajian
02 March 2010

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The pound dropped for a sixth day versus the dollar amid concerns political uncertainties will hamper efforts to reduce the U.K.’s debt. The currency weakened against 15 out of 16 most-active counterparts after polls showed Britain may have its first minority government since 1974 and ahead of a report forecast to show a recovery in consumer confidence stalled in February.
The U.K. currency yesterday had its biggest drop against the dollar since Feb. 2, 2009, as a poll showed the opposition Conservative Party holding the smallest lead over the Labour Party in more than two years.

Trading Tactics

A clear downtrend could be an opportunity to sell GBP/USD

The buying point is at 1.5030; Fibonacci 38.2% is the take profit at 1.5180;
Previous support is the stop loss at 1.4900

The selling point is at 1.4902; previous support is the take profit at 1.4780;
Fibonacci 23.6% is the stop loss at 1.5020

Technical: Sterling fails to breaks pivot point level and swing back downwards. A move back lower could set up a test of 1.4780

To strengthen our analysis; we use many other indicators, starting with MACD (Moving Averages convergence divergence); we notice MACD crosses the signal line downwards; RSI (Relative Strength Index) is in a downtrend; Momentum and stochastic are in a bearish direction.

The following analysis is for information only; Finotec is not responsible for any decisions or misinterpretations based on the given text.

By Finotec’s professional analyst,

dealingdesk@finotec.com

GBP/USD (Hourly Chart)

Finotec Analysis Team
02 March 2010

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