By Fast Brokers – The Cable bounced off of what is now our 1st tier uptrend line on solid volume as the Dollar experience broad-based weakness in the wake of solid Trade Balance data from China. However, the Cable’s rally has currency stopped short of previous January highs as investors away UK BRC Retail Sales Monitor and RICH House Price Balance data during the evening session. Regardless, the story dominating the headlines right now is China’s continued recovery from the nadir of the economic crisis. Imports swelled and exports turned positive, indicating consumption in China and around the globe is recovering. China’s imports outpaced exports, implied by a weaker than expected overall Trade Balance figure. Hence, investors are feeling comfortable with heading back to the risk trade as demand for products outside of China is on the rise. The UK will release Trade Balance data of its own during Tuesday trading session with investors expecting a deficit of -6.9 billion.
Technically speaking, today’s rally has created some breathing room between present price and the psychological 1.60 level once again. However, the Cable still faces multiple downtrend lines along with previous January highs. Furthermore, the 12/9-12/15 trading range could prove to be a solid barrier should it be reached. Therefore, quite a few obstacles remain considering the extent of December’s downturn. As for the downside, the Cable has multiple uptrend lines serving as technical cushions along with the psychological 1.60 level and previous January lows.
Present Price: 1.6129
Resistances: 1.6162, 1.6181, 1.6219, 1.6246, 1.6286, 1.6318
Supports: 1.6108, 1.6071, 1.6052, 1.6028, 1.5987, 1.5950
Psychological: 1.60, January highs and lows, December lows, September lows
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