An interesting day ahead for the GBP as Mervyn King speaks on the strength of the UK economy and the GBP whilst George Osborne will also later release details of his spending review.

23.35 TECHNICAL ANALYSIS: GBP/JPY Fails To Break Through 150.00 Resistance

 The technical analysis team at ICN.com have commented that the pound against the Japanese Yen could be heading towards a bullish bounce, stating: “The GBP/JPY pushed lower during the US session, having retested the minor ascending support for the latest bullish wave, in addition to the descending support of the consolidation ongoing consolidation. A potential bullish bounce looks likely from this support area, and so long as the 150.00 level is intact.” 

16.20 GBP Weakens Across The Board But The Euro Shares The Pain

The pound has weakened significantly over the last hour as it crashed through the 1.3200 mark against the dollar, down 0.60% from yesterday’s closing. Sterling has also fallen against the Japanese Yen where it is down 0.94% on yesterday’s closing and currently lying at 149.42 whilst the Australian Dollar is down 1.00% to 1.65.

The Euro, which is sharing similar problems, is the only one of the main currency pairs that the GBP is performing ok against, currently hovering around yesterdays close at 0.85% (down just 0.01%).

15.36 GBPUSD Short Term Technical Analysis Remains Bearish

GBPUSD technical analysis points to more bearish movements over the short term with increasing downside momentum. Having breached the 50 day Moving Average of 1.5387 it is now verging on a break of the 100 day Moving Average as well, currently standing at 1.5312. These bearish movements are likely to continue despite mixed sentiment towards the UK government spending reviews. 

Further bearish movements could see GBPUSD test the 1.5200 level in the short-term future.

14.35 US GDP Disappoints Halting Run of Better Than Expected Releases, GBPUSD Continues to Fall

The US GDP grew at a revised annual rate of 1.8% from the initial report of 2.4%. Expectations were that the growth levels would be in line with initial reports so the markets have been disappointed, though it has not been enough turnaround a difficult day for the GBP against the dollar.

The report released by the US showed negative revisions on virtually all the data contained within it (with only home construction and government avoiding it) could well spoil the USD party that started when Bernanke announced a likely end to the bond-buying stimulus next year.

GBPUSD is currently still below the 1.5400 level broken at 9am this morning, currently standing 0.35% lower at 1.5368.

13.00: LIVE UK Government Spending Review Highlights

Public Sector: 144,000 more job cuts and no more automatic pay rises for civil servants

Museums: Funding cut by 5%

Defence: Budget will be maintained with £14bn committed to equipment, growing at a rate of 1% thereafter. Intelligence services get 3.4% increase in funding.

Transport: Increased budget allows for £50bn investment in 2015 to aid projects and the transport department £9.5bn per year until 2020. Osborne said ""We're committing to the largest investment in railways since the Victorian era."

Education: Budget increased to £53bn, Osborne: "Now the lowest funded local authorities will get an increase in per pupil funding to make sure no child in any part of this country will be discriminated against. The pupil premium we have introduced makes sure we are fair to children from low income. It's getting £4.6bn, and over £21bn investment over the next parliament"

NHS: "The NHS is the people's priority. Its budget was £96bn when we came to power. In 2015/16 it will be £110bn and capital spending will rise to £4.7bn."

Tax Evasion: "We expect to raise £1bn more in tax revenues from those who try to avoid to pay their fair share."

Council Tax: Frozen for two years "saving each family £100".

Benefits: "We've been making sure benefit payments don't rise faster than wages," Osborne says. "The steps we've taken will save £18bn a year and each one was opposed by the welfare party opposite."

Housing, tax and disability benefits all included in reforms but not state pension: "Including the state pension would mean a Government could offset a rise in working age benefits with a cut in pension benefits. That penalises those who have worked hard all their lives. That is something this Government will not do."

Ed Balls responds to the chancellors comments: "Does he rememeber what he told the House three years ago? He said the economy would grow by 6pc but it's grown by just 1pc. He pledged to get the banks lending, but the banks lend less month on month on month. The AAA credit rating has been downgraded not once but twice. He promised living standards would rise but their falling year on year on year."

12.20 What's Going On With EURGBP?

EURGBP is looking increasingly bearish and it’s technical analysis continues to support this theory. Having broken out of a symmetrical triangle that it has been stuck in for over two months, the technical outlook suggests it will continue its move downwards. From a fundamental perspective the Euro is looking weaker across the board with several key issues that have previously had negative impact on the single-currency nations becoming increasingly concerning again.

The Euro has performed well over recent weeks boosted by the ECB opting to maintain key interest rates in early June, rather than pursuing negative deposit rates and was widely anticipated. However, this has been pulled back following the US Federal Reserve indicated the possibility of scaling back with a view to terminating its asset purchasing – which had a significant impact on the strength of the Euro.

These, along with a series of growing issues across the Eurozone, may well be leading up to a period of volatility with the overall result being a weakened Euro. Long term outlook is currently bearish.

EURGBP is currently hanging around yesterdays close, down 0.01% at 0.8478.

11.40 Pound Sterling Continues to Fall in European Trading

The pound sterling has continued to weaken today, falling 0.73% from yesterdays close against the Japanese Yen (JPY), 0.38% against the US Dollar and 0.79% against the Australian Dollar. This is ahead of Sir Mervyn Kings final speech to the press and the UK government spending review due out later today.

09.00 Morning Spot Rates - EURGBP, GBPUSD, GBPJPY, GBPAUD

The pound once again looks weaker across the in the European session as several major sterling pairs currently below yesterdays close.

GBP-AUD is 0.48 pct lower on yesterdays close at 1.6576

EUR-GBP is up 0.08 pct at 0.8486.

GBP-USD is down 0.08 pct to 1.5410

GBP-JPY is 0.37 pct lower at 150.2710

NB: The above are wholesale market quotes; your bank will affix its own discretionary spread when passing on your retail rate. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering more currency. Please find out more here.

08.50 - EURGBP Reaches June Lows in Early Morning Trading

EURGBP started the day by dropping to a new low for the month to date ahead of key releases from the UK government today. An early morning release by Germany of the GfK consumer Confidence index where the expectations were that it would match the previous months data at 6.5 showed an actual increased to 6.8. The EURGBP bounced off early lows and is now resting above yesterdays close.

The pair is showing support at 0.8470 but if this is broken it could trigger a move toward the May low of 0.8422.

07.45 - Key Events for the Day Ahead

Todays key events:

All times GMT+1

10.30 (UK) Bank of England governor Sir Mervyn King is making a speech on the Bank of Englands current outlook on the UK economy and the pound sterling. At the same time the Bank of England will release the Financial Stability Report, a report published twice a year and analyses the outlook and strength of the financial sector.

12.30 (UK) The UK government will release details of its spending review as it continues to implement its deficit reduction plan.

13.30 (US) The Gross Domestic Product Annualized shows the value of goods, services and structures in the United States from the first quarter of 2013. It will be an important release and could well effect the USD as recent data has done, with current expectations at 2.4%, the same as the previous quarter. Also released at 1.30 will be the first quarter core personal consumption expectations index and GDP Price Index data  

23.45 (NZ) The New Zealand trade balance data from May is released, the previous month was $157million whilst this release is expected a significant increase to $400m.