GBP/USD continues to follow its recent pattern, sliding in London on lousy economic data but rebounding in New York on who-knows-what. Short-covering is my favorite suspect, given the overwhelmingly negative outlook for for the UK economy in general and the pound in particular. The fact that we could rebound within hours of report as scary as the one from the BIS earlier today suggests there is an underlying bid below the pound which is to be ignored at one’s peril.
Connecting the recent tops in cable, we see trend resistance at 1.5292 today. A break could prompt some more significant short-covering. We trade now at 1.5246.
