Sep
4
2010

 

GBP/USD Battles Back Towards 1.55

The Cable battled back towards its psychological 1.55 level despite a weaker than expected UK services PMI release.  The negative services figure completes a disappointing cycle of PMI data as the UK underperforms.  Relative weakness in the UK has held down the Cable despite last week’s impressive rally in the risk trade.  However, positive developments in the risk trade allowed the Cable to stabilize and build off of August lows.  That being said, if the risk trade can continue its ascent next week then it is likely August lows will hold for an extended period of time.  Meanwhile, Monday will be a quiet trading session as Americans celebrate the Labor Day holiday.  Hence, positive sentiment generated from Friday’s better than expected U.S. non-farm payrolls figure will probably carry over.  Even though sentiment has taken a brisk turn for the positive, large question marks linger regarding the sustainability of the global economic recovery, so we’ll have to see whether big money can back the Cable’s new bottom and allow the risk trade to form a more lasting uptrend.        
Technically speaking, the Cable has supports in the form of 9/2 and 8/31 lows.  Additionally, the psychological 1.55 level could continue to have a noticeable influence over near-term movements in the Cable.  As for the topside, the Cable faces technical barriers in the form of 9/1 and 8/26 highs. 
Present Price: 1.5461
Resistances: 1.5472, 1.5503, 1.5530, 1.5551, 1.5572, 1.5598
Supports: 1.5449, 1.5419, 1.5398, 1.5374, 1.5342, 1.5322
Psychological: 1.55, August Lows
 
 
 

 
Posted by: Matthew Myers

 

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