Fitch ratings has announced that it has cut the outlook for UK long-term sovereign debt from stable to negative

<p>Fitch ratings has announced that it has cut the outlook for UK long-term sovereign debt from stable to negative. Although Fitch did affirm its AAA […]</p>

Fitch ratings has announced that it has cut the outlook for UK long-term sovereign debt from stable to negative. Although Fitch did affirm its AAA rating on the UK, the negative outlook means there’s a slightly greater than 50% chance of a downgrade over a two-year horizon.
EUR/USD
Range: 1.3004 – 1.3066
Support: 1.3010
Resistance: 1.3070

Euro-dollar closed in New York at 1.3032, off session lows of 1.3011. Strong demand for dollar-yen into the Asian session weighed back on euro-dollar as euro-yen met resistance on approach to 109.50, with the rate pressed down to lows of 1.30041. Although the rate met strong demand, said to be sitting ahead of decent sized option barrier interest at the figure, recovery through 1.3030 squeezed out weaker shorts that had been positioned for a break of 1.3000 and an expected triggering of stops below. The added buys extended recovery to 1.3056, the move taking euro-yen to extended highs of 109.63 before this rate reversed lower as yen pared back early Asian losses. Euro-dollar was holding firm into the European open. Support now looks at 1.3010 and then 1.2961, with resistance at 1.3070 and 1.3119.

GBP/USD
Range: 1.5637 – 1.5677
Support: 1.5636
Resistance: 1.5671

Cable closed in New York at 1.5667, off session lows of 1.5660, with the rate able to hold above the earlier Asian base at 1.5650. The rate edged up to mark overnight highs at 1.5671 into early Asian dealing before reversing lower, breaking below 1.5650 to extend pullback lows off Tuesday’s highs of 1.5745 to 1.5636. The rate recovered, nudging its way back towards the earlier high before settling around 1.5660 into Europe. Euro-sterling was contained within 0.8314-0.8329 through Asia, with early demand into Europe extending the highs to 0.8337. Strong offers noted through 0.8340-0.8350. Dollar action remains the main driver of trade as the market adjusts on reported QE3 unwinding following the recent FOMC meeting which was seen pushing this likelihood into the background. Cable offers remain at 1.5671 ahead of 1.5680-1.5685, a break exposing 1.5700-1.5705 ahead of 1.5720. Support at 1.5636, 1.5605-1.5600.

Gold
Range: 1636.40 – 1648.93;
Support: 1,634.60
Resistance: 1,650.50

Gold is attempting to stabilise this morning after another sharp drop yesterday as hopes of further QE from the Fed become distant. Long liquidation has been widespread in recent sessions as investors turn out of the metal into equities. Gold has traded up from early Asian lows of 1,636.25 to 1,648.85, but remains on a soft footing until a move and close above 1,681.60. Trendline support is seen at 1,601 which, if broken, would heighten chances of a further fall to around 1,645-1,650. As for today, nearby support is seen at yesterday’s low in New York of 1,634.60 and 1,625.50. Resistance is initially seen towards 1,650.50 and 1,675.50, ahead of the 200-day MA at 1,681.60.

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