By Fast Brokers – The Cable has been clobbered today despite a lack of pertinent news and/or data from the UK. EU anxiety remains at a heightened state after Sarkozy reiterated Frances support for Greece and objection to IMF involvement. Hence, Sarkozy is pitting France against Germany, which is becoming a heated showdown between the EU’s two economic powerhouses. Meanwhile, Greece has set a one week timeline for and EU plan before opting to head to the IMF for help. All of the EU uncertainty has finally bled over into the Pound, and the Cable has taken a drubbing despite this week’s surprisingly positive UK employment data. Additionally, the Reserve Bank of India raised rates by 25 basis points, surprising FX markets and accelerating risk-averse cash flows. With the data-wire quiet today, psychological forces will likely remain at the steering wheel. Meanwhile, it will be interesting to see whether the Cable and the risk trade in general can manage to stabilize from present levels amidst this wave of uncertainty. The UK will kick off next week with CPI and CBI Realized Sales data points, meaning Monday could be an active session as well. If UK CPI should come in hot again, this could keep the BoE at bay and discourage the central bank from injecting liquidity.
Technically speaking, the Cable still has multiple uptrend lines serving as technical cushions along with 3/15 and 3/16 lows. Additionally, the psychological 1.50 could serve as a solid technical cushion should it be tested. As for the topside, the Cable faces multiple downtrend lines along with intraday and 3/16 highs.
Present Price: 1.5074
Resistances: 1.5086, 1.5101, 1.5112, 1.5124, 1.5143, 1.5161
Supports: 1.5042, 1.5026, 1.5016, 1.5002, 1.4989
Psychological: 1.50, March lows
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