Cable Update (GBPUSD)

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MNI CABLE TECH: Break Below $1.6347 Triggers Bearish Key-Day Reversal
RES 4: $1.6726 76.4% retracement of $1.7041-$1.5708
RES 3: $1.6693 Hourly high
RES 2: $1.6620 Top of daily Bollinger band
RES 1: $1.6484/88 5-day moving average Low 22 Oct
CURRENT LEVEL: $1.6384
SUP 1: $1.6362 100-day moving average
SUP 2: $1.6317 38.2% of $1.5708 to $1.6694
SUP 3: $1.6240 Low 19 Oct
SUP 4: $1.6117/34 High 8 Oct Low 1 Sept Spike high 30 Sep Low 21 Sep
COMMENTARY: Bearish engulfing pattern so far and break below $1.6347
puts in a key-day reversal. Not much support seen until $1.6398 albeit
weak with nothing significant until the 100-day moving average at
$1.6362 and $1.6317 which is the 38.2% of the $1.5708 to $1.6694 rally.
Daily stochastic study is threatening bearish cross but not confirmed.

LONDON (MNI) - UK Chancellor of the Exchequer Alistair Darling said
unemployment would continue to rise and caution was needed over the
economic outlook.

Darling in a round of interviews after the shockingly weak Q3 GDP
data issued Friday stuck to his mantra that growth will turn positive
"around the turn of the year" but he urged caution and said the economy
is not out of the woods yet.

"The downturn in the first three months of this year was more
severe than anyone anticipated in this and in other countries too"
Darling said.

"I do think we need to be cautious. Unemployment is rising and will
continue to rise" he added.

He said he took "little comfort from the fact the rate of increase
(in unemployment) is less than people thought."

Darling was asked on BBC radio if he would drop his plans to
reverse the cut in VAT which he reduced from 17.5% to 15% until the end
of this year.

Darling insisted the VAT cut would expire at year end.
"The VAT increase I have always said was temporary. It was designed
specifically to bring forward spending into 2009. That is what it was
there for that is what it is going to do" he said. adding "the
reduction was temporary. It is going back up at the end of this year."
Darling declined however when pressed to say VAT would go
straight back up to 17.5%

The UK Chancellor did see signs of hope.

"If you look at what has been happening over the last few months
and particularly in the last couple of months I think there are signs
that confidence is beginning to return there are signs that things are
beginning to bottom out and that they are going to improve."
The Treasury forecast GDP would fall by 3.5% this year but the
third quarter data showed GDP falling 0.4% on the quarter to stand down
5.2% on the year.

The latest data make it inevitable the Treasury`s forecast will be
revised down by Darling avoided commenting directly on this other than
to say that in the first quarter of this year the downturn was worse
than expected and that he had been less optimistic than many
commentators about the economic outlook.

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"Two years ago I said this recession was going to be deeper more
profound than many people thought. I always said it would take time to
come through it" he said on BBC TV.

"Out job is to support the economy as we come through towards
recovery and whilst I have always said that I didn`t expect to see
growth until the turn of the year it will come. I am confident about
that" he said.

--London bureau: +4420 7634 1655; email: [email protected]