Cable briefly made new lows yesterday but there didn’t seem to be any appetite for further downside and the market swiftly rebounded above 17100.
The minutes the last Federal Reserve meeting caused a serious stir last night as it was revealed that Fed givernors had debated a slight change in the language used to accompany the last rate hike. While the Fed remain of the opinion that inflation is the biggest threat to the US economy, they discussed a possible slow down in the “measured pace” of rate rises that we have seen in place since June 2004. This may not sound massively significant, but it represents that first sign of cold feet from the Fed in the current cycle, and with traders having had a “green light” to buy the dollar for the last few months it caused a big move in the markets, driving cable from 17100 to 17250, and Euro from 11720 to 11860 overnight.
****We have the MPC minutes from the 10th November meeting (no change) this morning at 09:30.***
GBP USD – Support 1.7200, 17150 then 17062 (yesterday’s low)
Resistance 1.7260 then 1.7302
GBP EUR – Support 1.4532 then 1.4500
Resistance 1.4600, 1.4657 then 1.4675
DATA: MPC Minutes 09:30
Michigan confidence index 14:45
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