CABLE-currently sitting on very decent 1.5540-60 support. Watch that one carefully though, that is the third attempt on that support line as you can see. A break of that line would suggest a move to 1.5400-30 area.

USD/JPY-yet again, the resistance held yesterday, 85.80-00. Now the resistance moved to 85.40-60. Move through 85.60 would finally open up to test higher. I am quite bullish on these levels.. but the trade seems rather crowded and the last few attempts been quite disappointing.

EUR/JPY-that might be pointing out the obvious. But 108.90-00 still acting as a massive support and even though there is rumors of S/L below it and it trades heavy almost every morning, we don’t seem to be able to break it. On the chart you see it is building a wedge, with the levels at 108.90-00 and 110.20-40. As long stuck within there, especially in Asia, I doubt we will see any follow through. But keep an eye on it..

Any of the levels mentioned here, could be the trigger for the breakout we are all waiting for….

Still sitting short GBP here and it is not looking pretty. Technically, the resistance moved to 1.5130-40 now.

So, I ll take my S/L above 1.5155 to be save. Target still 1.4950 and lower.

Keep it tight though.

Sterling was extra strong with a  market chatter suggesting 800 mio GBP buy interest due to dividend repatriation while BoE Hawk Sentance saying the Sterling may be undervalued. A break of 1.5085 puts pressure on overnight longs in Cable and a mixed Sterling retrace via Cable and EURGBP at the same time, can lead Cable down to 1.4945.

Sell Cable at 1.5100 and 1.5130 with a tight SL at 1.5153, target 1.4945 and 1.4860.

Weak US new home sales data and a slightly downgraded outlook from the US central bank’s FOMC meeting caused US equity markets closing in red.

EURUSD had a 1.2210-1.2340 range overnight, I think EURUSD is going to have a tight range of 1.2245/1.2335 in Asian session as 1.2345/65  resistance holding it firmly. We may have a further drop to 1.2165 to test the daily bullish trend support, despite FOMC leaves additional clues suggesting that the Fed will not be raising rates even as late as January, 2011.

BoE minutes revealing a surprise 7-1 vote to keep the key interest rate unchanged  and no change to the asset purchase programme boosted Sterling while Cable caught market on the wrong foot above 1.4855 and highs printed at 1.4982 this morning.  1.4975/85 area seems to be capping at the moment while supports at 1.4915 and 1.4855.

Good Morning,

The energy sector and home-builders led S&P having a negative sentiment yesterday and on the back of it, currencies moved accordingly. AUD printed the lows at 0.8728 overnight and we touched lower to 0.8702 this morning. EURUSD still remains bid around 1.2245/1.2265 area while the low printed at 1.2251 in NY session. 1.2245/1.2375 would be the day range while Asia may have a 1.2255/1.2295 if anyone looking for a tight range.

The UK Chancellor announced a tough Budget consisting of savage spending cuts and higher taxes with a view to slashing the deficit to just 1.1% of GDP by 2015- 16. On top of cuts already planned by the previous government, an extra £30bn a year of spending cuts over the next fi ve years was announced. On the tax side, an increase in Value Added Tax to 20% in January is expected to raise £13bn per year while CGT is being increased for higher rate tax payers to 28%. There was, however, a surprise cut in Corporation tax to 24% gradually over the next four years (from 28%) to encourage enterprise although this was offset by a bank levy beginning 2011. Growth forecasts were downgraded to 1.2% in 2010, 2.3% in 2011 and 2.8% in 2012.

The direct approach in attempting to curb the deficit has so far been received well by financial markets while Fitch rating agency welcomed the “strong statement of intent”.

Cable had a range of 1.4690/1.4860 yesterday, still feels like sell on rallies Cable with a stop above 1.4935, targeting 1.44s..