By Fast Brokers – The Cable is fluctuating around its 1.54 level as investors dissect today’s Trade Balance data. The UK Trade Balance revealed a lighter than expected deficit, confirming the improvements we’ve seen in Manufacturing PMI data as of late. The declining deficit is a Pound positive, highlighted by weakness in the EUR/GBP. However, the FX markets are relatively tame today following yesterday’s high volatility. With investor uncertainty concerning Greece abating, focus now turns to U.S. data and earnings. Alcoa kicked off the season with a disappointing release, though we are just getting started. It will be very interesting to see how the Dollar reacts to earnings, specifically whether strong earnings would lead investors to favor the Dollar due to comparative economic performance or towards the risk trade instead. The U.S. will also release key Retail Sales and CPI data tomorrow, meaning volatility could return in a hurry. The UK will be quiet on the data wire tomorrow, meaning attention will likely be focused in on the U.S barring any market moving psychological developments. With the UK parliamentary election around the corner there remains the potential for surprise psychological events. Meanwhile, investors will be looking to see if the Cable and EUR/USD can sustain their new upward momentums and establish a more consistent uptrend pattern.
Technically speaking, the Cable faces technical barriers in the form of intraday, 4/12, 2/23, and 2/17 highs. Additionally, the psychological 1.55 level could serve as a solid obstacle should it be tested. As for the downside, the Cable has fresh uptrend lines serving as technical cushions along with intraday and 4/8 lows. Additionally, the psychological 1.54 area could continue to serve as a solid support over the near-term.
Present Price: 1.5421
Resistances: 1.5436, 1.5453, 1.5470, 1.5494, 1.5522, 1.5539
Supports: 1.5414, 1.5388, 1.5358, 1.5337, 1.5311, 1.5292
Psychological: 1.55, 1.54, 1.53, February highs and April Lows
(click chart to enlarge)
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