By Fast Brokers – The Cable is holding strong despite an intraday retest of 1.50. The Cable reacted badly to stronger than expected U.S. employment data this morning. However, the Dollar rally is fading and the risk rally is coming back with the Euro and Aussie also firming. Strong U.S. employment data spurs speculation that the Fed could tighter sooner than expected, resulting in the Dollar rush we just witnessed. Investors are now choosing the risk trade instead since continual improvement in the U.S. economy could result in stability throughout the globe. That being said, it will be interesting to see how the trading session plays out considering this morning’s volatility. Data is complete for the week, meaning investors will continue to work off of today’s releases. UK PPI printed in line with analyst expectations today, reassuring investors that inflation is under control. Meanwhile, the Pound is still enjoying a little relative strength derived from this week’s encouraging Services PMI data. The UK will start next week with BRC Retail Sales Monitor and RICS House Price Balance releases. However, these data points likely won’t be big market movers, meaning the FX markets could begin the trading week on a quiet note. However, there remains the possibility of a psychological flare up concerning UK and EU debt levels. Additionally, a considerable downward pressure is still weighing down on the Cable, meaning the Cable could need a big jolt to get out of its slump. Meanwhile, it will be interesting to see if the Cable can continue to build a base above 1.50 and March lows.
Technically speaking, the Cable has our 1st and 2nd tier uptrend lines serving as technical cushions along with intraday and 3/3 lows. Additionally, the psychological .150 level could work in the Cable’s favor shout it be retested. As for the topside, the Cable faces multiple downtrend lines. Our top tier downtrend line does run through 2/26 highs, meaning a breakout could yield substantial near-term gains should fundamental and psychological factors work in the Cable’s favor.
Present Price: 1.5038
Resistances: 1.5044, 1.5060, 1.5074, 1.5092, 1.5108, 1.5121
Supports: 1.5031, 1.5016, 1.5003, 1.4991, 1.4975, 1.4960
Psychological: 1.50, March lows
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