Wednesday October 20, 2010 - 02:01:54 GMT
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Forex Hound - www.forexhound.com
British Pound Sells Off Into Key 50% Level
British Pound investors pared positions in the Sterling, driving the
market sharply lower into a major 50% level. Cable traders decided to liquidate
long positions ahead of tomorrowâ€™s release of the Bank of England minutes.
Traders are worried that the BoE minutes will show that the
monetary policy committee members are leaning toward additional quantitative
easing. This policy is effectively the printing of money which weakens the
currency. Some investors believe that the new government spending cuts will
also put the U.K.
economy in a position to post a double-dip recession.
Technically, the main range is 1.5296 to 1.6106. The key
retracement zone of this range is 1.5701 to 1.5605. The 50% level at 1.5701 was
pierced and recovered on Tuesday. Uptrending Gann angle support comes in at
1.5606 which makes 1.5606 to 1.5605 an important support cluster.
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