By Fast Brokers – The Cable is consolidating along our 2nd tier uptrend line as we notice similar intraday patters in the EUR/USD and gold. Due to the relative lack of economic data, it seems investors are waiting for tomorrow’s slew of data from across the globe. Britain will release more pricing data on Tuesday, including CPI and RPI data points. Tomorrow’s data will go along with Friday’s disappointing PPI figure. Hence, it will be interesting to see if we witness a broad decline in UK prices. Should all pricing data print below analyst expectations it may be difficult for the BoE to maintain its new neutral/hawkish monetary stance. Furthermore, if tomorrow’s UK pricing data prints negatively and U.S. data outperforms once again, we could witness another wave of Dollar buying similar to what occurred on Friday. Meanwhile, FX investors are presently showing little reaction to Abu Dhabi’s announcement that it will provide $10 billion to help Dubai settle some of its expiring debt. However, we will have to see how U.S. equities open and whether activity picks up as the session progresses.
Technically speaking, the Cable appears to be flirting with dangerous territory since our 2nd tier uptrend line runs through October lows. Hence, should our 2nd tier uptrend line give way we could witness another sizable leg down towards the 1.58-1.60 area. Below our 2nd tier uptrend line the Cable does have our 1st tier uptrend line (off chart) serving as a technical cushion along with the psychological 1.60 level, September lows and October lows. As for the topside, the Cable still faces multiple downtrend lines along with 12/9 and 12/7 highs. Furthermore, the psychological 1.65 level could serve as a technical barrier should it be tested.
Present Price: 1.6233
Resistances: 1.6265, 1.6286, 1.6325, 1.6346, 1.6371, 1.6405
Supports: 1.6211, 1.6186, 1.6163, 1.6133, 1.6113, 1.6098
Psychological: 1.60, 1.65, September and October lows
Market Commentary provided by Fast Brokers.
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