By Fast Brokers – The Cable has logged more impressive gains today, climbing towards 1.53 after UK PMI data printed a bit above analyst expectations. The moderate rise in Manufacturing PMI shows that a weakened Pound is likely driving demand for the UK’s manufactured goods. Manufacturing PMIs from China and Japan also met estimates, bringing renewed confidence to the risk trade and the Cable is benefitting in the process. However, the Cable is edging lower in reaction to stronger than expected U.S. Manufacturing PMI data, leading investors to favor the Dollar over the Pound. It will be interesting to see how this trading session pans out, whether investors favor the Cable for the risk trade of the Dollar due to relative economic strength. The UK will be quiet on the data wire tomorrow along with everybody else but the U.S. Many investors will be taking a 3-day holiday weekend, meaning activity should be subdued during tomorrow’s trading session. However, the U.S. will release key employment data, including Non-Farm Employment Change and headline Unemployment Rate figures. Hence, tomorrow’s session could involve high volatility due to limited volume combined with key fundamental news. That being said, investors should monitor how today’s strong U.S. PMI data impacts the Cable since it could be a hint as to how the currency pair will react to tomorrow’s U.S. data set.
Technically speaking, the Cable has separated itself further from the psychological 1.50 level and has popped past its downtrend running through 3/17 highs, or the 1.5380 level. Hence, the Cable could have some more room to go on the topside over the near-term. As for the downside, the Cable has multiple uptrend lines serving as technical cushions along with intraday and 3/30 lows. Additionally, the psychological 1.51 area could serve as a solid technical cushion should it be tested.
Present Price: 1.5238
Resistances: 1.5245, 1.5254, 1.5263, 1.5276, 1.5288, 1.5301
Supports: 1.5215, 1.5205, 1.5191, 1.5179, 1.5169
Psychological: 1.51, 1.50, March highs and lows
(click chart to enlarge)
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