A major downtrend and the 38.2% retracement of the drop from just above 0.9800 have been taken out this morning as the UK banking system continues to end up more and more in the arms of Her Majesty’s government. Official rates are at rock bottom and term-rates are likely headed lower as well as the BOE scoops up Gilts to flood the UK banking system with excess reserves.
Buyers are now lined up on dips in the cross. Look to buy the retest of the downtrend breakout at 0.9045/50. 0.9220 is the near-term upside target, the 50% retracement of the 0.9803/0.8639 decline.
