US Dollar was under much pressure for most of the week as US Economics data reported last week were mostly negative with FOMC minutes showed some members viewed that further quantitative easing is needed.
Singapore widened the trading band of Singaporean dollar to allow faster appreciation of SGD while there are speculations that other Asian central banks will follow.
Bernanke's dovish speech on Friday seemed to have squeezed the last downside move out of the greenback as the dollar recovered impressively on Friday’s US session.
Does it mean that the that dollar is finally hitting a bottom and the markets are getting tired of QE II talks. It's seems that QE II is fully priced in for November meeting and market will start to feel indifferent to any further speculations.
For the coming week, there is a possibility for the markets to trade in some volatile manner as traders are searching for new theme.
For cable, a lot of attention will be on the Spending Review to be announced by the government on October 20. This will be a key to establish credibility on the government on its ambitious austerity plan to cut the worrying budget deficit. BoE minutes will also catch a lot of attention on the possibility of more QE from the bank.
GBP/USD after crossing the 50 EMA from above on Monday was trending downward and found support at previous week low. By Tuesday, the pair moved up aggressively toward swing resistance(SR) level.
By Fridat during the London session, the pair moved passed RI to almost touched T1 Level.
This week, I am expecting the pair to test support at 1.5888. If the pair managed to get through the resistance of the previous high of 1.6106 the next resistance point is at 1.6240.
