By Fast Brokers
The Cable busted through our 2nd tier downtrend line and the psychological 1.60 level as investors return to risk. We view the defeat of our 2nd tier downtrend line as a significant move, giving a green light to the Cable’s bull trend. Our 2nd tier downtrend line stretches back to July 2008 highs, meaning the GBP/USD has a ton of room to the upside with all near-term downtrend pressures out of the way. Investors are reacting to a much stronger than expected Nationwide HPI release, showing home values are improving in Britain. Today’s release counters this week’s evidence that Mortgage Approvals are slowing down. After fighting off a dismal CBI release yesterday, bulls were waiting for a bit of good news to run with. Even though Britain’s economic releases have been mixed this week, investors should keep in mind Britain released a wave of optimistic data over the past month. Today’s key gains in the Cable reflect the fundamental movements made by the EUR/USD and crude. Therefore, investors are returning to risk in a hurry as the global economic climate improves.
Investors will be waiting for the key economic data surfacing from the U.S. today. If the numbers exceed analyst expectations, we could witness a strong near-term rally with U.S. equities depreciating the Dollar and sending the European currencies higher. Regardless, the Cable has made a statement showing that the bull trend is alive and well. Keep an eye on volume to see if it confirms the key upward movement occurring. We maintain our bullish outlook in the Cable due to the aforementioned reasons.
Fundamentally, we find resistances of 1.6129, 1.6233, 1.6307, 1.6388, and 1.6462. To the downside, we see supports of 1.6062, 1.6011, 1.5949, 1.5886, and 1.5822. The GBP/USD is currently exchanging at 1.6128.
Market Commentary provided by Fast Brokers.
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