UK Data continues to come in this week, and if it disappoints, it could suggest that a slowdown is eminant. Furthermore, speculations are increasing that the Bank of England will go forward with another round of asset purchases to support the recovering economy.
If the news due out this week does serve to highlight the slowing UK outlook, the pair will likely fall. Certainly, the same sort of news has been the cause of the USD taking quitte the licking, but USD weakness is reaching extremes and there is a clear risk for a short squeeze across the board in the USD.
Other evidence that suggests that the pair is poised for a fall include the shooting star seen last week, and 1.59 looks to have been rejected.
For the specifics of my take on the pair see "My Trading Journal" link found at the top of this page.
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From the Desk of
Aaron Reid
Forex Strategist
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