FOREXYARD: Forex News Blog

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Sterling Beginning to Weaken Posted: 10 Jun 2011 12:28 AM PDT The British pound is showing signs of weakness as market players focus on interest rate differentials and expectations for the Bank of England Monetary Policy Committee to remain on hold in the near term. A recent string of negative news flow has been seen for sterling. A number of academics have called for the British government to scale back its belt tightening program, disappointing Halifax HPI numbers, followed by rigid comments from Moody's earlier this week that were quickly retracted. The stream of discouraging reports is occurring as the GBP/USD is inching closer to its long term trend line from the May 2010 low. Technical traders will be eyeing a break of this level which today comes in at 1.6175. It is possible that the next move for cable could be to the downside. Today's Economic Data Releases: GBP – Manufacturing Production m/m – 08:30 GMT Expectations: 0.0%. Previous: 0.2%. Previous PMI data releases point to a disappointing quarter for the British manufacturing sector. This could lead to further selling of the GBP/USD. A break of 1.6280 may take the pair lower to the rising trend line from the May 2010 low which comes in today at 1.6175. GBP – PPI Input m/m – 08:30 GMT Expectations: -1.2%. Previous: 2.6%. A surprise jump in the inflationary reading could give traders an opportunity to sell into any gains the pound may reap from such a result. CAD – Employment Change – 11:00 GMT Expectations: 21.8K. Previous: 58.3K. Declines in the USD/CAD appear to be capped by a rising trend line from the April low which comes in today at 0.9720. With a stop below this level and a target the 200-day moving average at 0.9940, this gives traders a potential opportunity to go long with a good profit to risk ratio of more than 4:1. Read more forex trading news on our forex blog.

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