Yesterday the major event in the UK was information about Moody's reduced Co-operative Bank's debt and deposit ratings to Caa1 from Ba3, the bank is on the verge of bankruptcy. The agency has announced that while the bank will be salvaged, the bank's investors may have losses. As the data on inflation was in line with the forecast, nothing prevented the pound from falling.
Today at 12:30 GMT+4 Bank of England meeting Minutes are published. At 22:00 GMT+4 FOMC Interest rate Announcement and at 22:30 GMT+4 B. Bernanke speaks. We consider that the Fed will adopt irregular decision – reduces buying of mortgage bonds on their balance, however, private banks, according to agreement with regulator, will buy them up to usual $45 billion per month. Thus, everyone will win, though the pound will move downwards.
In the short term we expect the price decreases to 1.5257 or lower to 1.5145. Technically, bearish mood has completely formed, on the H4 marlin oscillator is in negative zone, the price has overcome both indicator lines – blue one, the line of Kruzenshtern and a red one, balance line. The first bearish target is support of trend line on the H4 1.5528, the second target is 1.5488, support of trend line on the daily chart 1.5488, support of trend line on the daily chart, and the third target is 1.5406, confluence of trend line and the level of Fibonacci 38.2% on the H4.
