The British Pound rebounded on Tuesday after a suprise gain in the CBI survey. The UK currency was dragged down by the GBP/JPY on Monday, as the Yen initially surged on the back of Japan's Finance Minister's comments regarding currency intervention. The comments were eventually toned down and the Yen eased off its highs, allowing the Pound to rebound vs the Yen, as well as the Euro & Dollar. The GBP/USD, which found support near a key Fibonacci level(38.2% retracement of the March low to the 2009 high) was buoyed by a severly oversold daily RSI. The GBP/JPY also held up at key retracement (50% of the entire 2009 recovery). And after marking a fresh 24-year low on Tuesday, the beleagured GBP/AUD broke out of a bullish falling wedge to finish up 130 pips for the day. While the oversold nature of the Pound merits a temporary recovery, a retest of the recent lows may be required to build a formidable accumulation pattern. If a weak (slow-moving) counter-rally pauses at the 38.2, 50, 61.8 or 78.6% retracement level (from this week's recovery high to the swing low), a possible higher low could be in the cards. In the event of a marginal breach of this week's low, a possible double bottom pattern could be in store and the GBP should be accumulated. If, however, the current recovery begins to stall and is followed by an aggressive drive towards the low, caution is advised and suggests a broader correction is in place.
