Archived IMT (2010.08.18)

STERLING RALLIED immediately after the BoE minutes showed Andrew Sentence continued to call for a 25-bp rate hike. While this was no real surprise, some players thought that perhaps Sentence would not dissent considering the emerging slowdown in inflation across the G7. Considering yesterdays sharp slowdown in UK July CORE inflation, it appears as todays sterling rally is a little premature. After having tested its 200-day MA at $1.5498, GBPUSD rocketed over 1.7 cents but once again failed to take out the important $1.5720-30 resistance. With no major US economic releases, US equities could attempt to build on yesterdays gains, but 1100 on the S&P500 would have to be broken on the close to sustain the momentum of the rebound. Dow-30 made an intraday cross above the 200-day MA of 10,445, but failed to close above it. Watch out for the 10,450-10,500 territory, a CLOSE above which would be a vital positive for the bulls. EURGBP proved downtrend remained intact on inability to regain 0.83, now gradually eyeing 0.8210. CADJPY looking to finally regain 83.30s, as did NZDJPY at 61.30s.