| Daily Forex Technicals | Written by TheLFB-Forex.com | Aug 10 08 19:00 GMT | | |
| The pound is declining as the market prices in a U.K. recession. Banks repossessed the most homes since 1996 in H1 08 (an increase of 41% over the same period in 2007) and housing prices have now fallen back to where they were 2 years ago, the biggest drop in 25 years. On Aug 06, the International Monetary Fund (IMF) reduced its growth forecasts to 1.4% for 2008 after previously forecasting growth of 1.8% and warned that the UK faces a two year-long economic downturn. After projecting 2009 growth at 1.7% in the spring, it’s now saying that growth will be only 1.1%. While we do expect the pound to weaken further against the dollar, on a technical basis you may wish to wait for a break (or daily close) below Friday’s low on 1.9145, which was weekly resistance back in February 2004 as well as in the period between August and November 2006 in addition to being very close to the support in March 2007 for the pound’s run to 2.12.
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