Consolidation support continues to build just above the 1.56 level in the December Pound. While the Dollar might not be excessively overvalued relative to the Euro, Swiss and Yen, the Pound is not without fundamental support and economic potential. In fact, until the reversal in July it appeared as if the UK economy was going to be the world leader and with certain sectors of the UK economy not far from self-propagating growth, we think shorts are taking a risk in pressing the Pound around the 1.56 level. Pushed into a fundamental purchase of a non-dollar currency, it would be the Pound at 1.5641.
