Sep
7
2010
7
2010
GBP/USD Holds Steady Despite Negative EU News
The Cable is holding steady above previous September lows despite a brisk pullback in the EUR/USD in reaction to news that German banks may need an addition $135 billion in funding. Greek and German bond interest rates are on the rise and uncertainty is creeping back into the marketplace following last week’s positive turn in sentiment. However, the Cable is holding up relatively well since the currency pair has been underperforming lately and investors are likely allowing the EUR/USD to catch up. That being said, activity in the Cable should pick up again soon with key UK data on the way, including tomorrow’s manufacturing production release. Investors are expecting growth in manufacturing production to hold steady at 0.3%. Should the data point dip below par and broad-based sentiment doesn’t improve then the Cable may test the patience of August lows, if they don’t give way by then that is. Halifax HPI is also due for a tentative release, though we’ll likely receive this data point on Thursday. Meanwhile, we’ll have to wait and see whether the risk trade can weather present negativity and salvage the upward momentum generated by last week’s positive swing.
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: 1.5365
Resistances: 1.5374, 1.5398, 1.5419, 1.5440, 1.5464, 1.5490
Supports: 1.5342, 1.5322, 1.5298, 1.5274, 1.5252, 1.5229
Psychological: 1.55, August Lows
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Posted by: Matthew Myers
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