Sterling holds firm whilst awaiting UK inflation data and Bank of England minutes
Disclaimer: THIS MATERIAL IS NOT INVESTMENT RESEARCH AS DEFINED BY THE FINANCIAL SERVICES AUTHORITY
Looking ahead this week, the minutes of the Bank of England November meeting and UK inflation data will give some insight on short term sterling trend. The MPC minutes are due to be released on Wednesday and will give financial markets some indication of sentiment among committee members. If the consensus was that more Quantitative easing was favoured, this may increase the pressure on sterling.
Recent surveys have shown that business confidence fell for a second straight month in October, credit conditions still remain tight. House prices dipped in the first half of November. The UK economy is likely to have a “wavering” and unsteady path to recovery.
Traders will also be watching EUR/USD very closely this week, after making a good attempt to break above this year’s high last week the pair failed at 1.5050. The Euro was quickly pushed back towards 1.48 before finishing the week at 1.49. This move is fairly significant, given the current sentiment of the Euro positioned in severely overbought territory. From a technical perspective the Euro is a better sell at these levels. For now the 1.5063 level is key resistance, it is possible the pair is setting up a reversal pattern.
Monday 16 November 2009, 12:19pm
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