Britain's emergency budget allowed the Pound to stay away from a complete reversal in trend to the downside. An hour into the Speech of U.K. Treasury George Osborne, the Pound rallied impressive 100 pips. We see a potential for the Pound to gain strength in the New York Session off the news. The only upcoming obstacle would be the upcoming speech from US Treasury Giethner and release of Consumer Sentiment from EU as well as US Existing Home Sales. Action of credit agencies is the most influential part of the budget, so far only Moody's is looking at AAA-rating of U.K. As long as the fiscal picture remains upbeat in the “ Empire on which the sun (once) never set,” we would see a continuation of the trend to the upside.
Looking from the Technical perspective, we see a continuation of an uptrend in the Cable. With a force of the last low candle, which also coincides with the low of our Fibonacci replacement we believe the pair will continue to rise. The level that may act as support is the low at 1.4690, a break of 1.4700, will likely to initiate a downside rally. Current resistance hovers at 61.8% retrecement of today's high and low, stationed at 1.4840. A break of resistance may spur a rally to the high's of the day.
Disclosure: Long on AUD/USD