FUNDAMENTAL ANALYSIS
The pound profited from the general positive sentiment that came with the Greek bailout package.
But the incertitude concerning the approaching elections still weights and campaign poll results mixed with economical data could bring choppy movements until May.
With signs of improvements in the manufacturing and construction sectors, the fundamental outlook turns to neutral. However, many factors prevent investors from moving full speed ahead with long positions such as downard inflationary pressures and a still very weak labour market.
On another hand, the Bank of England is uncertain of its own monetary policy and has decided to stop its quantitative easing program last February in a "wait-and-see" approach. However, the Monetary Policy Committee says it could restart the program if needed.
TECHNICAL ANALYSIS
The 4-hour shows a breach of the 1.5480 resistance level. However, the price retraced quickly below that level, which commands us to remain cautious.
The daily chart reveals a mixed situation. The long term trend is still to the downside, but the rebound off 1.4800 could suggest the formation of a double bottom. If the pound manages to form a new base above 1.5380, then the trend would switch to the upside. Until then, we stay neutral.
Resistance levels:
- 1.5380
- 1.5484
Support levels:
- 1.5126
- 1.4800
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