By Fast Brokers – The Cable is rallying in reaction to a weaker than expected Employment Change figure. The Cable’s response is understandable considering the Dollar’s December rally was driven by a turnaround in employment data. It will be interesting to see if the Cable can extend its intraday gains due to the level of anticipation prior to today’s data release. We’re witnessing Dollar weakness across the board at the moment while the Pound exhibits a relative strength, as highlighted by a dip in the EUR/GBP. The Pound is deriving its strength from a better than expected PPI figure in conjunction with yesterday’s encouraging Halifax HPI reading. Hence, data from the UK has outperformed the EU during the first trading week of 2010. Meanwhile, stability in prices gives the BoE a little breathing room come February’s monetary policy meeting in regards to maintaining a tighter monetary stance. For the time being it will be interesting to see whether the Cable can piece together enough upward momentum to overtake the remainder of our downtrend lines.
Technically speaking, the psychological 1.60 level is serving as technical once again along with our multiple uptrend lines and 1/07 lows. As for the topside, the Cable still faces multiple downtrend lines along with January highs. Our 4th tier downtrend line could serve as a key technical barrier since it runs through 12/16 highs. Meanwhile, our 1st tier uptrend line separates the Cable from a retest of December lows.
Present Price: 1.6072
Resistances: 1.6085, 1.6107, 1.6152, 1.6181, 1.6219, 1.6246
Supports: 1.6050, 1.6023, 1.5995, 1.5973, 1.5925, 1.5901
Psychological: 1.60, January highs and lows, December lows, September lows
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