By Fast Brokers – The Cable is holding strong and has defended 4/6 lows for the 2nd day in a row. Strength in the Cable comes despite worries in the EU as Greece’s bond yield climb to record highs. Hence, and EU/IMF intervention is becoming more likely, driving up uncertainty and deterring investors from the risk trade in the process. Despite today’s sour news in the EU, UK housing prices and manufacturing production data both improved, giving the Pound a relative strength as the currency fights its own uncertainty stemming from the potential of a hung parliament. Meanwhile, the Cable is building a solid base as the currency pairs sets higher lows. Regardless, volatility is increasing and uncertainty rising, so investors should keep an eye on the news wire for any further developments regarding Greece or any other fiscally troubled EU economies. Both the BoE and ECB kept their monetary policies unchanged as anticipated. Hence, focus now shifts to economic fundamentals and any more psychological developments. That being said, the data wire will be relatively quiet tomorrow besides the release of input PPI. Therefore, psychological forces may be in the driver’s seat as the trading week comes to a close. The Cable does still have a downward force bearing down on it despite its separation from key downtrend lines. Hence, it would be encouraging for the Cable’s uptrend to see the currency pair break out of weekly highs and test March highs as a confirmation for its new uptrend. If not, then the downtrend may sneak back into play.
Technically speaking, the Cable is still trading comfortable above downtrends running through March 17 highs, or the 1.5380 area. The Cable does face technical barriers in the form of previous April and March highs should they be tested. Therefore, the Cable’s uptrend is still alive and well despite this week’s volatile sideways action. Additionally, the Cable has fresh uptrend lines serving as technical cushions along with intraday, 4/6, and 3/31 lows.
Present Price: 1.5232
Resistances: 1.5235, 1.5247, 1.5259, 1.5273, 1.5292, 1.5305
Supports: 1.5218, 1.5198, 1.5188, 1.5177, 1.5167, 1.5151
Psychological: 1.53, 1.52, March highs and April Lows
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
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