By Fast Brokers – The Cable is taking a step lower right now along with the rest of the risk trade as the Euro tumbles in the wake of Greek bond yields hitting 8.2%+. Greece’s budget deficit came in higher than anticipated, placing even more pressure on the government to seek outside help. Additionally, the overall EU budget shortfall as hit its highest level since the formation of the union over 10 years ago. The fear of contagion is understandably delivering a blow to the risk trade and the Cable is no exception. UK retail sales came in 3 basis points below analyst expectations, giving investors little to cheer about. However, the Cable is still holding up relatively well as it derives strength from yesterday’s impressive CCC figure. As for the U.S., weekly unemployment claims hung above 450k and PPI came in hotter than anticipated, encouraging investors to pick up the dollar in the process. Meanwhile, investors should keep their eyes on the EUR/USD and monitor its ability to hold 1.33 and April lows. If the currency pair tumbles below key supports this could drag the whole market lower. Investors are also awaiting U.S. existing home sales. If today’s housing data also disappoints this could fuel risk-aversion. The data wire won’t slow tomorrow with important releases from around the globe. In fact, the UK will print Prelim GDP. Considering the improvements in employment and manufacturing, it wouldn’t be surprising to receive a solid GDP number, which could help buoy the Cable.
Technically speaking, the Cable has multiple uptrend lines serving as technical cushions along with 4/21,4/20, and 4/19 lows. Additionally, the psychological 1.53 area could serve as a psychological cushion should it be tested. As for the topside, the Cable faces multiple downtrend lines along with intraday, 4/12, and 4/15 highs.
Present Price: 1.5385
Resistances: 1.5388, 1.5404, 1.5419, 1.5435, 1.5453, 1.5469
Supports: 1.5371, 1.5354, 1.5341, 1.5325, 1.5310, 1.5285
Psychological: 1.55, 1.54, 1.53, 1.52, April highs and lows
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
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