By Fast Brokers – The Cable is gravitating towards 1.45 while managed to hold strong above May lows. Meanwhile, the EUR/GBP continues its freefall as the Pound outperforms amid uncertainty in the EU. Keep in mind UK data has been solid lately, giving investors ample reason to hold onto the Pound despite major headwinds blowing from the EU. However, should the EUR/USD continue its rapid decline then the Cable may snap and follow suit sooner or later. Lasting strength in the Cable could depend on Thursday’s BoE meeting. Even though UK inflation is higher than the central bank’s target, the BoE’s hands may be tied considering the present fragility of the global economy. Meanwhile, EU finance ministers will meet to try and reassure markets that the situation is under control, though the truth is far from it. However, should finance ministers emerge from the meeting with little accomplished then the risk trade could take another blow. Psychological forces should drive the FX markets until Thursday due to the relatively light data wire around the globe. Hence, markets are all about news over the next 48 hours and we’ll have to wait and see whether another development crops up.
Technically speaking, the Cable still faces multiple downtrend lines along with 5/28 and 6/2 highs. As for the downside, 1.45 could become a technical cushion once again along with 6/7 and 5/25 lows.
Present Price: 1.4489
Resistances: 1.4498, 1.4526, 1.4554, 1.4587, 1.4609, 1.4640, 1.4673
Supports: 1.4440, 1.4409, 1.4382, 1.4348, 1.4321, 1.4301
Psychological: 1.45, June highs and May lows
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regarded neither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.
Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.
