The market has found the Fed's assessments words dovish. They could not avoid repeating the fed's inflation worries as their growth slow down worries. Bernenke has insured his recent comments that there is a need to stabilize the market after the housing and credit problems... We wait the release of further inflation rates this week from US and this can help clear the market view. Recently there were good jobs data in the recent 2 months. In the October fed's meeting the words were declaring the fed's needs to wait and watch till the end of this year but signs of growth and consuming slow down have increased.
The pound could find a room to correct technically its rally to 2.116 in the last 2 weeks to 2.017 pressured by a lower high at 2.084. The downside risk can increase as long as we are still lower than this level and 2.069. The trend line extension from 2.116 to 2.084 is still well above us. The new target can be 1.99. The need for a break over 2.062 is essential to overcome this emerging down side pressure and to break the trend line shortly. Gaining upside momentum can not be by breaking 2.084.
The gold rates can keep its gain as the prospects of cutting interest rates are still ahead in spite of the oil prices easing. The upside inflation risks resulted in these cuts underpin its rate specially as there is doubts of the effect of these current interest rate cuts which can cause a stagflation case which can paint a brighter picture of the precious metal. The Fed, ECB, BOE, SNB and BOC recent declaration to ease the global liquidity concerns by injecting much more funds into the credit financial markets can add to its value too. The Fed has mentioned that there are auctions facilities worth 20 billion at least to be offered well below the discount rate with no mention of a certain institution or bank can get benefits of these loans.
Best wishes
FX Consultant Walid Salah El Din Mob: +20 12 465 9143 E-Mail: snipped-for-privacy@fx-recommends.com