By Fast Brokers – The Cable is holding strong above its highly psychological 1.50 level despite strong rallies in the dollar and yen across the board. Negative news from China to Europe is taking its toll on the risk trade, sending the EUR/USD tumbling back below its psychological 1.22 level. China’s SCI dropped by nearly -5% after leading economic indicators disappointed investors. Meanwhile, Spain has requested the ECB to keep its emergency window open and Greek citizens are on the streets protesting austerity measures, denting confidence in the EU’s ability to handle its fiscal crisis. Altogether, investor confidence has taken a hit today, sending investors towards the risk trade. However, the Cable is holding strong as the Pound continues to benefit from optimism over last week’s MPC minutes and broad approval of parliament’s emergency budget. That being said, the Cable will be tested again this week as the UK releases nationwide HPI and final GDP. Should fundamental data disappoint and downward pressure remains on the risk trade the Cable could undergo a sharp sell-off and play catch-up. On the other hand, if UK fundamentals print positive this could help the Cable sustain its relative strength.
Technically speaking, the Cable faces technical barriers in the form of 6/28 and 5/4 highs. As for the downside, the Cable has intraday and 6/25 lows serving as technical cushions along with the highly psychological 1.50 area.
Present Price: 1.5059
Resistances: 1.5072, 1.5089, 1.5105, 1.5118, 1.5136, 1.5152
Supports: 1.5048, 1.5028, 1.5013, 1.4985, 1.4957, 1.4931
Psychological: 1.50, June highs and lows
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
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