Good Evening / Morning Dynamic Traders
"Better to have tried and failed, than not tried at all"
Cross = GBP: Day Chart (Posted Below)
We have followed the Cable over the last 2 weeks and even though we are "Technical Analysts", the following is good reading:-
The latest political saga out of UK suggests that Gordon Brown's days may be numbered. The British Prime Minister was dealt a devastating blow last night when James Purnell - the Works & Pensions Secretary - quit the Cabinet and told Brown to stand down to save the Labour Party.
Mr Purnell in a letter to Mr Brown wrote, " We both love the Labour Party. I have worked for it for 20 years and you far longer. We know we owe it everything and it owes us nothing. I owe it to the party to say what I believe no matter how hard that may be. I now believe your continued leadership makes a Conservative victory more, not less likely."
"We need to show that we are prepared to fight, to be credible government and have the courage to offer an alternative future. I am calling on you to stand aside to give our party a fighting chance of winning."
If Mr Brown were to step down, the weakened Labour party may be forced to call early elections. The political turmoil in the UK is weighing heavily on the pound, but the cross remains barely above the key 1.6000 level as corporate bids have provided support so far. However, the temptation to knock out those barriers will likely prove too powerful to resist as the day progresses, especially if any risk aversion flows themselves after NFPs.
Ironically enough, an early election and a possible win by Conservative will most likely be viewed as a positive development by the market and Cable could recover, but for now it remains vulnerable to further sell off.
You will see from our day chart, that price has returned to the comfort of our previuos trading channel and looks to test 1.6000 today. All our indicators are Bearish and our Bearish engulfing candle pattern as indicted midweek started the change.
Remember NFP due out today could also weaken the Cable.
Courtesy of Advanced Get / E Signal
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