By Fast Brokers – The Cable is sticking with its April trading range as we kick off the month of May. The Cable is edging lower today as investors are unimpressed with the EU and IMF’s bailout plan thus far. Meanwhile, the Cable does seem to have a downward bias as it sets lower highs (4/30, 4/26, 4/15). Even though the data wire is relatively quiet today outside of America’s manufacturing PMI, activity in the FX market looks set to bloom as the trading week progresses. Australia will kick off the news barrage tomorrow with an RBA meeting followed by the UK’s own manufacturing PMI figure. However, the core of the news and data will come on Thursday with the UK printing its services PMI along with the highly anticipated parliamentary election. Election polls have really jolted the Cable over the past couple months, so it wouldn’t be surprising to see volatility peak election day. Investors should keep in mind that no clear majority, or a hung parliament, could prove to be negative for the Cable over the near-term due to speculation that the government won’t be able to tackle the nation’s fiscal problems. On the other hand, should the conservatives manage to eek out a victory then this could result in a huge pop in the Cable. Meanwhile, attention will remain focused on the EU along with any unexpected news concerning the election.
Technically speaking, the Cable has multiple uptrend lines serving as defense along with 4/19, 4/26, and 3/31 lows. Additionally, the psychological 1.51 and 1.50 levels could serve as solid technical cushions should they be tested. As for the topside, the Cable faces multiple downtrend lines along with technical barriers in the form of 4/5, 3/17, and 4/26 highs. Furthermore, the psychological 1.53 level could serve as a solid barrier should it be reached.
Present Price: 1.5247
Resistances: 1.5260, 1.5279, 1.5293, 1.5317, 1.5339, 1.5351
Supports: 1.5235, 1.5223, 1.5209, 1.5191, 1.5170, 1.5141
Psychological: 1.53, 1.52, 1.51, 1.50, April highs and lows
(click chart to enlarge)
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