Whatever other effects the UK’s QE measures have had on the economy it appears to have stabilized the pound greatly. The yearly range is much tighter than it has been in years. We do not see the pound falling from $2 to $1.35 us. The pound has found a support at the 1.5350-154 level for the past year or so and that is a level we will need to watch in the coming month.

The GBP/USD closed the week at 1.5426 with an rsi of 42. There is room for it to depreciate further but most likely it will not go lower than 1.5330 or so. On the upside it appears capped at 1.57. The QE measures implemented by the UK seems to limit the pound’s appreciation but conversely it also appears to limit its depreciation. We could look to trade the pound between 1.53 and 1.57 in the weeks to come. In the short term we need to watch the area in and around 1.5330. Any drop below this spells big trouble for the pound.