By Fast Brokers – Standard and Poors sent the Pound lower today after it released a statement saying that UK banks aren’t the ‘most stable and low-risk’ in the world, comparing them to financial institutions in Chile and Portugal. Standard and Poors bleak assessment of the UK’s financial industry has resulted in a comparative weakness in the Pound, highlighted by a pop in the EUR/GBP and emphasized by a large pullback in the Cable. The Cable’s weakness has been exacerbated by stronger than expected U.S. economic data. Strong U.S. GDP, Chicago PMI, and Revised UoM data has sent the Dollar higher across the board as the U.S. looks to be a viable safe haven amongst global uncertainty. The Cable reacted to the U.S. data set by plunging below 1/22 lows and nearly testing the psychological 1.60 level. However, the Cable seems to be finding strength in our 1st tier uptrend line and is attempting to stabilize to avoid another key technical setback considering our 1st tier runs through December lows, or the 1.585 area. That being said it will be interesting to see how the session plays out considering the volatility we’ve witnessed thus far. Will investors decide to head back to the risk trade, or stick with a strong Dollar theme as the week comes to a close? As for the UK, the economy did get a piece of good news in that Nationwide HPI surpassed analyst estimates. The data train will continue next week with the release of Manufacturing PMI and Net Lending to Individuals on Monday.
Technically speaking, the Cable has experienced a large setback today and is currently testing some key supports in the form of our 1st tier uptrend line and the psychological 1.60 area. As we stated before, our 1st tier runs through December lows, or the 1.5850 area. As for the topside, the Cable faces multiple downtrend lines along with 1/8 and intraday highs.
Present Price: 1.6034
Resistances: 1.6046, 1.6061, 1.6078, 1.6098, 1.6124, 1.6149
Supports: 1.6028, 1.6003, 1.5981, 1.5964, 1.5964, 1.5940, 1.5921
Psychological: 1.60, December lows and highs
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