Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
Will Labour Government Spending Bankrupt Britain? UK Debt and Deficits - 7th Dec 19
Lib Dem Fake Tory Election Leaflets - Sheffield Hallam General Election 2019 - 7th Dec 19
You Should Be Buying Gold Stocks Now - 6th Dec 19
The End of Apple Has Begun - 6th Dec 19
How Much Crude Oil Do You Unknowingly Eat? - 6th Dec 19
Labour vs Tory Manifesto Voter Bribes Impact on UK General Election Forecast - 6th Dec 19
Gold Price Forecast – Has the Recovery Finished? - 6th Dec 19
Precious Metals Ratio Charts - 6th Dec 19
Climate Emergency vs Labour Tree Felling Councils Reality - Sheffield General Election 2019 - 6th Dec 19
What Fake UK Unemployment Statistics Predict for General Election Result 2019 - 6th Dec 19
What UK CPI, RPI and REAL INFLATION Predict for General Election Result 2019 - 5th Dec 19
Supply Crunch Coming as Silver Miners Scale Back - 5th Dec 19
Gold Will Not Surpass Its 1980 Peak - 5th Dec 19
UK House Prices Most Accurate Predictor of UK General Elections - 2019 - 5th Dec 19
7 Year Cycles Can Be Powerful And Gold Just Started One - 5th Dec 19
Lib Dems Winning Election Leaflets War Against Labour - Sheffield Hallam 2019 - 5th Dec 19
Do you like to venture out? Test yourself and see what we propose for you - 5th Dec 19
Great Ways To Make Money Over Time - 5th Dec 19
Calculating Your Personal Cost If Stock, Bond and House Prices Return To Average - 4th Dec 19
Will Labour Government Plant More Tree's than Council's Like Sheffield Fell? - 4th Dec 19
What the UK Economy GDP Growth Rate Predicts for General Election 2019 - 4th Dec 19
Gold, Silver and Stock Market Big Picture: Seat Belts Tightened - 4th Dec 19
Online Presence: What You Need to Know About What Others Know About You - 4th Dec 19
New Company Tip: How To Turn Prospects into Customers with CRM Tech - 4th Dec 19
About To Relive The 2007 US Housing Market Real Estate Crash Again? - 3rd Dec 19
How Far Will Gold Reach Before the Upcoming Reversal? - 3rd Dec 19
Is The Current Stock Market Rally A True Valuation Rally or Euphoria? - 3rd Dec 19
Why Shale Oil Not Viable at $45WTI Anymore, OPEC Can Dictate Price Again - 3rd Dec 19
Lib Dem Election Dodgy Leaflets - Sheffield Hallam Battle General Election 2019 - 3rd Dec 19
Land Rover Discovery Sport Brake Pads Uneven Wear Dash Warning Message at 2mm Mark - 3rd Dec 19
The Rise and Evolution of Bitcoin - 3rd Dec 19
Virtual games and sport, which has one related to the other - 3rd Dec 19
The Narrative About Gold is Changing Again - 2nd Dec 19
Stock Market Liquidity & Volume Diminish – What Next? - 2nd Dec 19
A Complete Guide To Finding The Best CFD Broker - 2nd Dec 19
See You On The Dark Side Of The Moon - 2nd Dec 19
Will Lib Dems Win Sheffield Hallam From Labour? General Election 2019 - 2nd Dec 19
Stock Market Where Are We?  - 1st Dec 19
Will Labour's Insane Manifesto Spending Plans Bankrupt Britain? - 1st Dec 19
Labour vs Tory Manifesto Debt Fuelled Voter Bribes Impact on UK General Election - 30th Nov 19
Growing Inequality Unrest Threatens Mining Industry - 30th Nov 19
Conspiracy Theories Are Killing This Nation - 30th Nov 19
How to Clip a Budgies / Parakeets Wings, Cut / Trim Bird's Flight Feathers - 30th Nov 19
Hidden Failure of SIFI Banks - 29th Nov 19
Use the “Ferrari Pattern” to Predictably Make 431% with IPOs - 29th Nov 19
Tax-Loss Selling Drives Down Gold and Silver Junior Stock Prices - 29th Nov 19
We Are on the Brink of the Second Great Depression - 29th Nov 19
How to Spot REAL Amazon Black Friday Bargains and Avoid FAKE Sales - 29th Nov 19

Market Oracle FREE Newsletter

UK House prices predicting general election result

Has Sterling Found its Feet?

Currencies / British Pound Apr 01, 2010 - 05:57 AM GMT

By: Seven_Days_Ahead


Best Financial Markets Analysis ArticleThe Technical Trader’s view:


The market has been pressured down from the Double Top that formed beneath the resistance from the Prior Lows at 1.7050 and 1.6802.

The measurable minimum move implied by that Top was actually somewhat lower than where the market got to. Probably as far as 1.45.

But the support from the Fibonacci at 1.4860 has been considerable – plus that from the High at 1.5066.

That has certainly held up the bears.

But it may have reversed the move as well…


The Double bounce from the 1.4798 low is clear. As is the penetration of the (weak) falling diagonal around 1.51.

But the bulls should be wary of anticipating too much on the upside.

Only a break up through 1.5360 would really get them going by completing a Double Bottom

And that is a little way off.

The Macro Trader’s view:
Until quite recently traders were almost queuing up to sell the Pound and there seemed an almost endless list of reasons to justify their bearishness:

  • The UK economy was the last of the major developed economies to emerge from recession,
  • UK government spending had pushed the budget deficit to record levels with a rapid expansion of the National debt,
  • The trade data remained deep in negative territory as it refused to adjust after a prolonged spell of currency weakness,
  • Inflation never collapsed in line with official forecasts and remained above levels experienced in other G7 countries, and of course
  • The political landscape looked challenging to say the least. With an election drawing ever closer, a hung Parliament looks likely making important difficult decisions look almost beyond agreement.

So why has Sterling suddenly bucked up?

Over the last couple of weeks one or two of the ear factors above have changed. True, a hung Parliament still looks the most likely outcome, and, whichever political Party emerges as the largest will have a difficult time trying to push through necessary public spending cuts/tax hikes.

But the economic recovery looks a little more robust:

  • The Q4 C/A deficit released yesterday shrank to £1.7, a fraction of what was expected.
  • The final version of Q4 GDP showed an upward revision; recovery will still remain a tepid affair, but talk of a dip back into negative growth looks misplaced.
  • Inflation released the previous week corrected lower instead of the upward spike the markets had feared, and
  • Retail sales, which are by far the largest chunk of GDP, recorded a month on month increase of 2.1% when released last week.

And despite a hung Parliament looking likely, politicians are at last starting to agree that the deficit needs to be cut. The disagreement now is about how fast and by what route: spending cuts, tax hikes or a mix of the two.

So now, when investors look at the UK and the Pound more specifically, they struggle to find new reasons to be bearish. Against all three major currencies, the Dollar, Euro and Yen, the Pound has rejected the lows. If the run of data can be maintained a recovery may be possible.

But the election result is likely the missing piece in the gig saw holding back a more robust recovery. Note well that if the Conservatives were to win, the Pound could rally again and smartly.

Mark Sturdy
John Lewis

Seven Days Ahead
Be sure to sign up for and receive these articles automatically at Market Updates

Mark Sturdy, John Lewis & Philip Allwright, write exclusively for Seven Days Ahead a regulated financial advisor selling professional-level technical and macro analysis and high-performing trade recommendations with detailed risk control for banks, hedge funds, and expert private investors around the world. Check out our subscriptions.

© 2010 Copyright Seven Days Ahead - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Seven Days Ahead Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules