After last Friday optimism of US non-farm payrolls figure of October which came at 171k while the market was waiting for 125k and also the upward revision of September figure from 114k to 148k which came supporting the greenback, The British pound is still able to have its feet over 1.6 versus the greenback while it is still keeping the tries to go up versus the single currency pushing it down to be traded versus it around 0.8 psychological level with the market expectations of having new adding to the current Stg375bln BOE assets purchasing plan are easing down as the economy has given good sign in the third quarter could be reliable in the future as UK GDP rose 1% q/q unchanged yearly, while the market was waiting for contraction by 0.5% y/y and growth by 0.6% q/q thanks to London Olympic games.
These figures have come out to the market to diminish the hopes for another push by BOE which has already given mixed minutes about that plan effectiveness in driving up the economy in its recent meeting to give more doubts about its members' decision about it when they meet this week and may be also in the future after exhausting the recent increasing by 50bln last July.
God willing, The market will be waiting today for Oct UK PMI Services Index which is foreseen to ease back to 52 from 52.2 in September following Oct PMI Construction index which has referred to improving to 50.9 from 49.5 while the consensus was referring to falling to 49.1 last Friday after the manufacturing index had tumbled earlier last week to 47.5 from 48.1 in September while the markets were waiting for shallow declining to 48.
So, The market will be focusing tomorrow to know more about the manufacturing performance in UK on the release of UK Manufacturing productions of September which are expected to show rising monthly by 0.3% after falling in August by 1.1% while the industrial productions are expected to ease back again in September by 0.6% after falling by 0.5% in August.
God willing the cable can meet now in the case of easing back further psychological supporting level at 1.60 which can be followed by another supporting level at 1.5913 whereas the 38.2% Fibonacci retracement level of the rising from 1.5268 to 1.6309 which could hold back its recent falling from its formed top at 1.6309 on 21st of last September and if it is to fall too, there can be more supporting levels to be met at 1.5823, 1.5753,1.5636 which can be followed by 1.5456 which its breaking can lead to 1.5391 again whereas it has formed its bottom on 12th of last July to the current levels while rising again from here can be faced again by 1.6178 resisting level which could hold previously in the face of its appreciation following the optimistic figures of Q3 UK GDP and in the case of breaking it, there can be more supporting levels to be met at 1.6216, 1.6272 before 1.6309 again.
FX Market Strategist
Walid Salah El Din
Mob: +20 12 2465 9143
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