The Cable is getting clobbered after the CBI stated Britain's economic growth could be worse than forecasted. Furthermore, the CBI is urging its Chancellor not to commit more funds to economic stimulus and quantitative easing in the upcoming budget.

While one would like to believe the ease of quantitative easing would have a positive impact on the Pound, the opposite is occurring. The Cable's contraction in response to the news shows investors believe the CBI's reluctance to encourage further use of liquidity to fight the economic downturn could do more harm than good to Britain's economy.

With the BOE's benchmark rate hovering near zero, the CBI is proposing taking away the only tool left to ease credit markets. On the other hand, the CBI's decision could be a sign of confidence that the worst of the economic crisis has been realized.

Like the EUR/USD, the GBP/USD's uptrend has several foreseeable uptrend lines to prevent a real correction back into its long-term downtrend.

Furthermore, despite a pop in the EUR/GBP, the currency pair still has considerable forces in place towards the downside. Therefore, the Cable has quite a few fundamental and correlative pieces helping out the bulls.

However, the GBP/USD sent a strong message by falling below our 3rd tier uptrend line and more near-term losses could be realized. The big question will be whether the recent improvement in Britain's economic data can continue. Britain will return to the forefront on Tuesday with the release of CPI and RPI.

Fundamentally, we find resistances of 1.4579, 1.4612, 1.4677, 1.4730, and 1.4770. The 1.50 level remains a key psychological barrier while 1.45 serves as a psychological cushion. To the downside, we see supports of 1.4532, 1.4478, 1.4438, 1.4391, and 1.4362. The GBP/USD is currently exchanging at 1.4573.

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