By Fast Brokers – It seems the Standard and Poor’s bearish statement on Friday in regards to the state of the UK’s financial industry has carried over into today’s trading session. The Cable has been hit hard, plunging below its psychological 1.60 level and previous January lows as the Pound underperforms, highlighted by a solid pop in the EUR/GBP. Weakness in the Pound comes despite stronger than expected Manufacturing PMI data. Hence, UK manufacturing, employment, and home prices are all recovering nicely right now. Such strong manufacturing data would normally be a positive catalyst for the Pound, yet it seems investors uncertainty surrounding the state of the global economy is overpowering more encouraging fundamental developments. The Cable has now caught up with the EUR/USD and AUD/USD, which both logged larger losses last week. Meanwhile, investors are awaiting America’s Manufacturing PMI number. Furthermore, the markets will receive a monetary policy decision from the RBA during tomorrow’s Asia trading session followed by Halifax and construction PMI from the UK. Additionally, investors should continue to monitor news concerning the Greece debt issue. Should the EU make a decision in regards to how it wants to handle Greece, the FX markets could experience volatility across the board. Momentum in the Dollar is clearly to the upside right now. However, it will be interesting to see how the Cable handles December 2009 lows and whether the currency pair can make a rally back to its psychological 1.60 level.
Technically speaking, we’ve created some new uptrend lines for the Cable running from October and December ’09 lows. Furthermore, these lows could serve as technical cushions should they be reached. As for the topside, the Cable faces multiple downtrend lines along with 12/24 and 1/08 highs. The psychological 1.60 area now becomes a psychological barrier.
Present Price: 1.5924
Resistances: 1.5932, 1.5953, 1.5979, 1.6005, 1.6024, 1.6046
Supports: 1.5912, 1.5895, 1.5876, 1.5863, 1.5849, 1.5832
Psychological: 1.60, December and October lows
Market Commentary provided by Fast Brokers.
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