Archived IMT (2010.10.26)

STERLING BOOSTED BY HIGHER THAN EXPECTED Q3 GDP, which rose 0.8% q/q and 2.8% y/y, twice more than expectations. The figures were propped by the highest construction spending since Q1 1988, raising questions over the sustainability of this sector. While the WEEKLY cable chart continues to show negative oscillators, the daily chart allows for shorter-term gains towards $1.5880s. Im sticking with my bearish GBPUSD call, targeting $1.5770 & $1.5720 for later this week. The 55-day MA stands at $1.5650, which is the base of the last 5 days. SEK DROPPED across the board after the RIKSBANK issued a DOVISH RATE HIKE, raising the repo rate by 25-bps to 1.0%. 2 members argued against the rate hike, while the overall committee stated that weak developments overseas and low inflationary pressures mean slower pace of tightening ahead. The bank lowered its 2011 and 2010 repo rate outlook to 2.0% from 2.4%, and to 2.9% from 3.3% respectively. EURSEK regained 9.2, now facing the previous trend line support at 9.27. WATCH OUT FROM THE GRAVESTONE DOJI IN THE DAILY S&P500, which could portend a lower rest of the week, thereby likely lending near-term stability to the USD. Watch US consumer confidence today for a possible catalyst to these developments.