The week began in Asia with Sterling trading weaker across the board as McDonald’s Corp announced it’s relocating its European headquarters from London to Geneva, taking advantage of preferential intellectual property laws. In addition, the UKFI (UK Financial Investments Ltd.), which was set-up the manage the UK’s government stake in RBS and Lloyd’s commented that exiting the bank stakes could take several years, coupled with further write-downs from Lloyd’s (13 Billion Pounds) pushed the Sterling down almost 2 big figures against the USD. However the dust has settled and Cable has been fighting back all day. On the hourly chart below we see the pair has broken the 200hr moving average and is approaching trendline resistance and the 38.2% retracement. We will watch these levels to provide resistance, with a break leading to the 50% level in the short-term.
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