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How Bernanke rescued the pound
The pound has rallied after Ben Bernanke's comments on Wednesday that the US economy is still going to need to be supported. And Richard Perry, chief market strategist at Central Capital Markets, is looking to capitalise on the pound/dollar trade this Thursday.
Speaking at a conference, the Fed Chairman indicated the central bank needs to maintain easy monetary policy. That's put pressure on the dollar. There's also a thought that a recent sell-off in cable's been over done.
Richard expects the pound to continue to rally in the medium term. However, this could provide a selling opportunity because he says it will then fall back down to around $1.4813.
He thinks the 50% Fibonacci retracement of the $1.5750 to $1.4813 decline comes in at $1.5280 (around 130 ticks higher), and that there is also a reaction high at $1.5306 (around 150 ticks).
Richard is planning to place a stop with a little bit of room under the reaction low at $1.5080.
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Tags: ben bernanke, bernanke, cable, dolalr, dollar, fed, federal reserve, fibonacci, fx, gbp, gbpusd, monetary policy, national bureau of economic research, pound, saxo bank, saxo tv, saxotv, sterling, tradingfloor.com, usd