So much for sleepy Mondays…
Cable is leading the currency spiral this morning as the Prudential PLC deal to buy AIG’s Asian business for $25 bln in cash and over $10 bln in stock helped tip the scales against the pound. Throw in growing fears of a hung Parliament and the growing dent problem and you have yourself a rout.
Stops have been triggered as low as 1.4784 and now the pound is on the rebound with order boards as vacant as downtown Detroit. It trades now at 1.4915. Look for sellers toward 1.5000 near-term.
EUR/USD’s performance has been very unimpressive given the strong odds of at least a partial bailout of Greece this week. It would have been interesting to see if the market could have staged a recovery without the Cable collapse, but alas, we will never know.
1.3440/50 is the line in the sand for EUR/USD from a technical perspective. Barriers lie at 1.3425, 1.3400 and 1.3300, traders report.