Forex: GBP/USD plunges on Greenspan remarks

FXstreet.com (Barcelona) - Alan Greenspan said "markets will crater" if the US politicians don't sort out the "fiscal cliff" and triggered risk aversion, allowing the greenback to surge. US President Obama is meeting with the four top leaders of congress (John Boehner, Mitch McConnell, Nancy Pelosi and Harry Reid) to discuss the "fiscal cliff". The GBPUSD wasn't able to hold gains made ahead of the NY opening and eased progressively to eventually plunge strongly to 1.5836 low, turning "red" on the day, back to the 2-month lows.

ECB's Noyer commented about the OMT and Greece, saying that one day the OMT bond purchases could be used for Greece. Earlier, Industrial Production in the US indicated that a contraction by -0.4% in October, instead of growing by +0.2% as expected. Data had risen by +0.4% in the prior month.

UBS analysts are bearish on the pair: "Negative bias persists and the pair faces the risk of testing support at 1.5789 ahead of 1.5666", they wrote, pointing to resistance at 1.5916 in case of a reversal.