By FastBrokers – The Cable is consolidating following yesterday’s solid pop as the currency pair fluctuates between 1.46-1.48. However, activity should pick back up again as the session progresses with UK nationwide HPI and services PMI data points on the way. More solid UK data could help the Cable continue its upswing from May lows. On the other hand, a setback in fundamentals could keep the Cable anchored below weekly highs. The U.S. will also release its own services PMI data point along with advance employment data. Hence, investors can expect a volatile end to the trading week. While recent gains in the Cable and EUR/USD have been encouraging, downward near-term technical pressures remain and both currency pairs need a sizable confirmation to the topside to solidify a new uptrend. Meanwhile, investors should also keep an eye on the EU news wire as usual since there hasn’t been a positive fundamental change in fiscally troubled nations to give us reason to discount the possibility of another negative development. That being said, no news is good news and allows the Cable and EUR/USD to stabilize and gain back some lost ground due to short memory.
Technically speaking, the Cable has been able to build off of the base established from May lows and it will be interesting to see how long this pattern lasts. The Cable has supports in the form of the psychological 1.45 level along with 5/28 lows. As for the topside, the Cable still faces multiple downtrend lines due to the extent of its May crash. The Cable also faces barriers in the form of 5/13 and 5/12 highs. Additionally, the psychological 1.50 area could serve as a strong technical barrier should it be tested.
Present Price: 1.4681
Resistances: 1.4701, 1.4736, 1.4758, 1.4789, 1.4822, 1.4850
Supports: 1.4662, 1.4645, 1.4626, 1.4606, 1.4567, 1.4534, 1.4506
Psychological: 1.45, 1.50, May 2010 highs and lows
(click chart to enlarge)
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