By Fast Brokers – The Cable has popped to new April highs after the EU announced it is providing Greece with roughly $40 billion @ 5%. The deal has sparked a rally in the risk trade and the Cable has been more than willing to participate. After all, last week’s UK housing and manufacturing came in strong, placing the Cable in an environment to benefit from positive risk flows. The Cable is separating itself further from any meaningful downtrends, meaning this new upturn stemming from March lows could have legs. Should conditions in the EU continue to calm then focus will likely turn more towards economic fundamentals, meaning investors should keep a closer eye on the data wire. Although the UK was quiet on the data wire today, it will reenter the fray tomorrow by releasing the BRC Retail Sales Monitor, RICS House Price Balance, and its Trade Balance figures. The U.S. will follow with its own Trade Balance data, meaning investors will be digesting both import and export data. Since the UK’s manufacturing data has printed well, it would be surprising to see a smaller than expecting deficit. Meanwhile, investors should also keep an eye out for any election polls hitting the news wire throughout the week since we’ve seen these numbers have a noticeable impact on the Pound over the past month. Should the Conservatives lose ground to Labor this could drag on the Cable, and vice versa.
Technically speaking, the Cable faces technical barriers in the form of intraday, 2/23, and 2/17 highs. Additionally, the psychological 1.55 level could serve as a solid obstacle should it be tested. As for the downside, the Cable has fresh uptrend lines serving as technical cushions along with intraday lows. Additionally, the psychological 1.54 area could serve as a solid support over the near-term.
Present Price: 1.5402
Resistances: 1.5414, 1.5436, 1.5453, 1.5470, 1.5494, 1.5522
Supports: 1.5358, 1.5337, 1.5311, 1.5292, 1.5273, 1.5253
Psychological: 1.55, 1.54, February highs and April Lows
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Market Commentary provided by Fast Brokers.
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