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GBP/USD continuation of breakout

FXstreet.com (London) - GBPUSD has extended its break out below the 38.2% support line from the recent ascending channel formed in May.

The fundamentals are stacking up again against the pound, with a dovish set of minutes now amongst them along with poor retail sales that came out yesterday. Retail Sales came in at +0.5% in April vrs +2.0% - not a good result for sterling. BoE said today that six members of the Monetary Policy Committee voted to keep quantitative easing at 375 billion pounds ($568 billion) this month. King, Miles and Fisher stuck to a campaign to increase stimulus by 25 billion pounds. According to the minutes, “There was tentative evidence that measures of medium-term inflation expectations were becoming more sensitive to short-term news in inflation…Financial markets were not expecting further asset purchases at this meeting and might, at the margin, reassess the committee’s tolerance of elevated inflation should additional stimulus be injected.”


The pair took a nose dive yesterday from the high, 1.5172, to 1.5019, the low, in a series of offers that led the pair through a number of support zones. Most of the volatility came as Bernanke spoke on ‘The Economic Outlook’, when close attention was being paid to his testimony to the Joint Economic Committee of Congress. Cable opens the European session oscillating on the downside support between 1.5025/44 territories below 1.5081 pivot point. The next support for the pair is 1.4995 and 1.4965. Closes below 1.5100 and key resistance in the breakout level below 1.5315 opens up 1.4830 (March lows) and key target 1.4355 (2009)

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