By Fast Brokers
The Cable did top out yesterday at our 1.5158 resistance as volume tapered out. However, we view the decline as profit taking since the Cable has had such an impressive run as of late. The GBP/USD is encouragingly finding stability at the highly psychological 1.50 mark, showing the investors are getting comfortable with a 1.50+ future. The Cable is experiencing relative strength after yesterday’s impressive showing in Britain’s Construction PMI. Britain has stringed together a couple weeks of encouraging data, keeping the ball in the bull’s court. While yesterday’s retracement to 1.50 was expected, the Cable remains above all of our uptrend and downtrend lines. Therefore, if the next 24-48 hours go well data and news wise, the Cable could receive the high volume boost we’ve been waiting for, and the currency pair would be off to the races. As a result, we maintain our bullish outlook trend wise. The GBP/USD continues to surpass key technical barriers and is leaving our downtrend lines behind, meaning the uptrend should have considerable room to grow.
Britain’s Nationwide Consumer Confidence number came in better than expected earlier today, keeping the data winning streak alive. However, the resilience of Britain’s economic recovery could be tested today with the release of its Halifax HPI and Services PMI data points. Last week’s Nationwide HPI came in well above analyst expectations, so it will be interesting to see if tomorrow’s Halifax number relays the same message of stabilization in home prices. America’s Pending Home Sales blew by expectations Monday, so a resounding message of recovery in housing builds a solid foundation for the uptrend to spring from. We will also see America’s ADP Non-Farm Employment Change later today, meaning activity in the GBP/USD should pick up from yesterday’s session.
Fundamentally, we find resistances of 1.5059, 1.5114, 1.5158, 1.5213, and 1.5257. To the downside, we see supports of 1.5017, 1.4988, 1.4946, 1.4902, and 1.4869. 1.50 serves as a key psychological cushion with 1.55 acting as a psychological barrier. The GBP/USD is currently exchanging at 1.5028.
Market Commentary provided by Fast Brokers.
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