We have seen a serious move on cable and eurodollar the last few sessions. Dollar weakness ahead of today’s Federal Reserve meeting this evening is the main theme, with worries that the Fed’ may signal a softening of the long series of interest rate rises. Any sort of statement suggesting that these rate hikes will be moderated during 2006 could send the dollar sharply lower. Remember, the whole dollar rally has been based on sharply higher US rates, and if this story evapourates, the dollar is likely to fall.
The UK Consumer Price Index at 09:30 could impact sterling.
GBP EUR – Support 1.4800 then 1.4705
Resistance 1.4875 then 1.4910
GBP USD – Support 1.7675 then 1.7500
Resistance 1.7781-95 then 1.7825
DATA: UK CPI 09:30
US Retail Sales 13:30
US Business Inventories 15:00
Federal Reserve Decison 19:15
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