Archived IMT (2011.01.06)

STERLING sheds a full cent after UK Dec services PMI unexpectedly contracted (49.7 from 53) for the first time since April 2009. This comes a day after UK construction contracted for the 1st time since February 2010. Recall sterling was the strongest performer on Tuesday following 16-year highs in manufacturing PMI. But with these two contractions in construction and services as well as the general stabilization in USD, traders may regain confidence in expecting $1.5270s. Note that despite GBPUSD recent recovery, the pair failed has failed three times to break above its trendline resistance extending from the Nov 4 high. $1.5660-70s was the required breakbut it failed. Traders now set their sights to the 200-day MA at $1.5412, followed by $1.5350s and the $1.5270 target projected in this Dec 15 chart http://chart.ly/yn4xak3