By Fast Brokers – The Cable is trading back below its psychological 1.60 level today despite pops in both the EUR/USD and AUD/USD. It’s difficult to determine exactly what’s driving the Pound lower today, as exhibited by a strong upward movement in the EUR/GBP. There’s limited news and data flows around Western economies as the markets enter another holiday shortened week. Furthermore, there’s limited data from the UK until Thursday’s Nationwide HPI release. Hence, the Pound’s relative weakness today may be carrying over from last week’s cautious BoE Meeting Minutes which indicated that the central bank is not likely to take any monetary action until February’s meeting as governors assess the impact of recent QE measures. Meanwhile, the U.S. will light up the data wire today with the release of CB Consumer Confidence and HPI figures. More mixed data from the U.S. could weaken the Dollar further as investors lock-in profits derived from investor confidence in the U.S. economy, a positive catalyst for the Cable. On the other hand, strong U.S. econ data should keep the Cable subdued around 1.60 and previous December lows.
Technically speaking, the Cable’s large pullback this month has sent the currency pair below some key technical levels. Hence, it’s possible the Cable could be entering a more protracted downturn. However, we’ll have to see whether the Dollar’s present weakness can accumulate and send the Cable back above some downtrend lines. If not, the Cable does have some technical supports in the form of September and October lows. As for the topside, the Cable faces multiple downtrend lines along with 12/18 and 12/16 highs.
Present Price: 1.5996
Resistances: 1.6005, 1.6023, 1.6045, 1.6071, 1.6096, 1.6132
Supports: 1.5972, 1.5943, 1.5917, 1.5899, 1.5875, 1.5845
Psychological: 1.60, 1.65, September and October lows
Market Commentary provided by Fast Brokers.
Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.
Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.
