By Fast Brokers – The Cable was unable to hold onto its psychological 1.60 yesterday and proceeded to set new December lows as the Dollar strengthened across the board. We notice the USD/JPY trading higher and the EUR/USD moving south, indicating the Dollar’s positive momentum is back in play. Investors are likely indicating a preference for the Dollar since the Greenback’s uptrend has been positive throughout most of December, and with the data wire relative quiet for the holiday season investors seem to be reverting back to the Dollar’s more dominant momentum. Meanwhile, investors are waiting for America’s upcoming Chicago PMI release. The UK data wire is quiet until tomorrow’s Nationwide HPI figure, so added emphasis may be placed on the Chicago PMI data should it surprise in either direction. That being said, activity could remain in a subdued state as investors take off for the New Year holiday. Regardless, investors should keep an eye on the Cable’s interaction with September and October lows should they be tested.
Technically speaking, the Cable’s large pullback this month has sent the currency pair below some key technical levels. Hence, it’s possible the Cable could be entering a more protracted downturn. However, we’ll have to see whether the Dollar’s present weakness can accumulate and send the Cable back above some downtrend lines. If not, the Cable does have some technical supports in the form of September and October lows. As for the topside, the Cable faces multiple downtrend lines along with 12/29 and 12/22 highs.
Present Price: 1.5892
Resistances: 1.5912, 1.5929, 1.5967, 1.5995, 1.6026, 1.6067
Supports: 1.5875, 1.5845, 1.5821, 1.5793, 1.5796
Psychological: 1.60, September and October lows
Market Commentary provided by Fast Brokers.
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