Dollar and yen are mildly higher today as Moody's said risks are growing to the four largest AAA rated countries, including UK, US, France and Germany and they have moved substantially close to losing the top-notch rating. There are also some uncertainty on Euro as some European finance ministers ruled out aid for Greece for the moment. French Finance Minister Christine Lagarde said Greece does not need help. German Finance ministers echoed the comment and said there's no need to present an aid plan at the moment.

Among the major currencies, Sterling is clearly the weakest one and drops over 1% against dollar and Canadian dollar so far. EUR/GBP is back above 0.91 level and is set to take on 0.9137 near term resistance. GBP/USD has possibly completed recent consolidations from 1.4783 too and will probably have a retest on 1.4783 low in near term. Meanwhile, Swiss franc is noticeably strong against its European counterparts with EUR/CHF finally broke 1.4577 support o 17 month low. GBP/CHF also dives sharply today to as low as 1.5914 to resume recent decline. We'd expect the current fall to continue towards 100% projection of 1.8111 to 1.6115 from 1.7110 at 1.5114, which is close to 2008 low of 1.5111.

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On the data front, US Empires state manufacturing index dropped less than expected to 22.86 in March. Industrial production rose 0.1% in February. TIC capital flow dropped to 19.1B in January. Swiss combined PPI dropped -0.3% mom, -1.0% yoy in February. UK rightmove house price rose merely 0.1% mom in March. Japan house hold confidence improved slightly from 39 to 39.8 in February.

GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.5079; (P) 1.5148; (R1) 1.5271; More

GBP/USD's break of 1.5024 minor support suggests that consolidation from 1.4783 might have completed at 1.5216 already. Intraday bias is flipped back to the downside for retesting 1.4783 first. Break will confirm that whole fall from 1.6456 is resuming for next target of 200% projection of 1.6875 to 1.5829 from 1.6456 at 1.4364. On the upside, above 1.5216 will delay the bearish case again and bring more consolidations first. But after all, we'd expect upside to be limited by 38.2% retracement of 1.6456 to 1.4783 at 1.5422 and bring fall resumption.

In the bigger picture, there is no change in our bearish view. That is, medium term rebound from 1.3503, which is treated as a correction to down trend from 2.1161, has completed at 1.7043 already. Fall from there is tentatively treated as resumption of the down trend from 2.1161 and should target a new low below 1.3503. On the upside, break of 1.5814 resistance is needed to invalidate this view. Otherwise, outlook will remain bearish.

GBP/USD