Our analysis of Monday was absolutely right, and the correct decision was to stay out of the $uros to poundsrong> pair for the time being. Yesterday saw a wide spread up day, as the UK pound weakened on the statement from the BOE, with the word ‘deep’, which panicked the markets and we have seem this trend continue this morning. It is too early to say whether this is a temporary reversal from the bearish trend, or a longer term reversal back to the highs of late December – only time will tell, but one thing is certain – we have to wait for a confirming signal in the charts before re-entering the market as there are several issues which are very confusing at the moment. Firstly the moving averages are all crossing and recrossing one another, and secondly we are moving back into an area of congestion which may signal the trend for the next few days. If this is penetrated then we could see a move back up towards 0.9200, but a failed attempt would see prices start to fall again. As always we will have to wait for the signal, and when it does arrive I will highlight it for you (trust me!)

I have discussed the $undamental news Europe on the euro to dollar site, and for the UK pound on the pounds to dollars site.

The short term outlook is sideways, the medium and long term is bearish.