By Fast Brokers – The Cable managed to bottom out above May lows yesterday, a positive near-term technical development as the risk trade tries to settle following last week’s hefty downturn. The EU data wire will be relatively quiet again today, leaving the FX markets up to psychological developments in the EU. The U.S. will highlight the wire with DGO and new home sales figures. However, the stability of the Cable and the risk trade as a whole hinges on the state of the EU and ability of governmental leaders to calm markets. On the other hand, should investors receive another piece of bad news regarding Spain this could send the Cable on another leg to the downside. The data wire will carry more weight tomorrow with the UK releasing CBI realized sales followed by U.S. prelim GDP and unemployment claims. Also, UK nationwide HPI is due for a tentative release, though it likely won’t come until Friday or the beginning of next week. Investors should keep an active eye on the news wires over the next 24 hours since psychological forces continue to move the markets.
Technically speaking, the Cable faces multiple downtrend lines along with 5/24 and 5/14 highs. Additionally, the psychological 1.45 area could serve as a solid barrier should it be tested. As for the downside, the Cable has support in the form of intraday and 5/20 lows. Furthermore, the psychological 1.42 level could serve as a technical cushion if it’s reached.
Present Price: 1.4393
Resistances: 1.4409, 1.4443, 1.4468, 1.4498, 1.4521, 1.4543
Supports: 1.4362, 1.4326, 1.4301, 1.4265, 1.4232, 1.4200
Psychological: 1.42, 1.45, May 2010 and February 2009 lows
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