British Pound Sells Off Into Key 50% Level

British Pound investors pared positions in the Sterling, driving themarket sharply lower into a major 50% level. Cable traders decided to liquidatelong positions ahead of tomorrow’s release of the Bank of England minutes.

British Pound investors pared positions in the Sterling, driving themarket sharply lower into a major 50% level. Cable traders decided to liquidatelong positions ahead of tomorrow’s release of the Bank of England minutes.

Traders are worried that the BoE minutes will show that themonetary policy committee members are leaning toward additional quantitativeeasing. This policy is effectively the printing of money which weakens thecurrency. Some investors believe that the new government spending cuts willalso 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 keyretracement zone of this range is 1.5701 to 1.5605. The 50% level at 1.5701 waspierced and recovered on Tuesday. Uptrending Gann angle support comes in at1.5606 which makes 1.5606 to 1.5605 an important support cluster.