Daily Analysis

September British Pound

An unexpected rise in British industrial production along with greater demand for higher yielding assets is helping to support the rally in the September British Pound. This market has now regained 50% of its August break. Some of the rally could be contributed to position squaring ahead of this week’s Bank of England meeting. In light of the recent improvements in the economy, traders are curious as to whether the BoE will make adjustments to its quantitative easing program.

Technically, the main range is 1.7043 to 1.6110.  50% of this main range is 1.6577.  A downtrending angle comes in at 1.6563.  This forms a major retracement zone at 1.6563 to 1.6577.  Today's rally stopped at 1.6589 and fell back below this resistance cluster. 

Regaining 1.6577 puts this market in a strong position.  If 1.6589 becomes a top then look for a possible correction back to 1.6350.