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By Fast Brokers – The Cable has extended yesterday\u2019s rally resulting from the Fed\u2019s decision to maintain its loose monetary policy for the foreseeable future.\u00a0 Investors were speculating about the possibility of an alteration in the Fed\u2019s timeframe for tightening liquidity.\u00a0 Hence, the central bank\u2019s dovish language instigated a rally in the risk trade across the board.\u00a0 After cooling down during today\u2019s Asia trading session, the Cable came to life again after the UK\u2019s Claimant Count Change registered a -32.3k decline, considerably lower than estimates of an 8.2k increase.\u00a0 The shocking improvement in the UK\u2019s unemployment picture countered bearish sentiment concerning weakness in manufacturing and fiscal fears, sending the Cable well beyond its 1.53 level in response.\u00a0 Additionally, MPC meeting minutes revealed some concern about inflation coupled with a unanimous vote to keep QE measures unchanged.\u00a0 The show of concern for inflation implies that the BoE could be reluctant to increase liquidity again, a Cable positive considering there has been considerable speculation that the BoE would loosen.\u00a0 The tide has certainly shifted for the Cable, which has surged well beyond our previous 3rd tier downtrend line.\u00a0 Our 3rd tier runs through February 17 highs, or the 1.58 level.\u00a0 Hence, technical indicators imply that the Cable could have more topside room to explore over the medium term.\u00a0 In the meantime, investors will key in on Bernanke\u2019s testimony before congress during the afternoon.\u00a0 The UK will release Public Sector Net Borrowing tomorrow followed by U.S. CPI, weekly Unemployment Claims, and the Philly Index.\u00a0 Therefore, tomorrow could prove to be another active trading session.\u00a0 Meanwhile, investors should also keep in mind the potential for more negative psychological developments regarding the UK\u2019s troubling fiscal situation.<\/p>\n
Technically speaking, the Cable has multiple uptrend lines serving as technical cushions along with intraday lows.\u00a0 As for the topside, the Cable faces multiple downtrend lines along with intraday and 2\/25 highs.\u00a0 Our new 3rd tier downtrend line could prove to be a key barometer since it runs through 1\/28 highs, or the 1.6275 area.<\/p>\n
Present Price: 1.5306<\/p>\n
Resistances: 1.5318, 1.5334, 1.5354, 1.5377, 1.5397, 1.5416<\/p>\n
Supports: 1.5288, 1.5272, 1.5252, 1.5236, 1.5281, 1.5205<\/p>\n
Psychological: 1.53, 1.54, March highs<\/p>\n
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