The cable has stepped into a big event this week. Today the bank holiday on account of May day and Thursday’s election are the major events. The cable erased its weekly gains and closed with losses. The parallel resistance at 1.5550 shows the strength again. But finally the cable managed to close above 20Wsma. This event took place after 38 weeks. Today at the Asian, session the pound is trading higher against the USD and is capable of holding above 20Wsma 1.5110. Ahead of the UK’s election on Thursday, the pound is trading higher against the USD. Initially, we expected the pound to be under pressure, but the soft USD allows the cable to fly high. From the April low’s, the cable rose more than 900 pips. At yesterday’s session, the cable edged lower and probably made a double top at 1.5498. The strong resistance seems at a 1.5550 previous swing high on the daily chart and 200Dema. Though the cable closed above 20&50Dsma, bullish crossover has not taken place yet. The cable managed to recover the March losses in April. At Friday’s session, the cable drifted below 100Dsma, favoring bears. The pair has the nearest support at 1.5100. Strong support is seen at 1.5000 50& 20Dsma.
Key support levels:
20WSMA 1.5100, 50DSMA & 20DSMA 1.5000
200DSMA1.5550, 200DEMA 1.5683. A double top at 1.5498 is rounded to 1.5500, 100DEMA at 1.5225,and 100DSMA at 1.5165.
The above technical levels have provided, ahead of big event- UK’s election. We expect wild moves in this week.
Intraday view: The cable shifted from lower lows to lower tops on the hourly chart after April 20. A double top was formed at nearly 1.5500. The trading pattern is framed between 1.5500 and 1.5000. For risky traders, we recommend buying above 1.5330 with targets at 1.5385, 1.5400, and 1.5390. Bulls can challenge 1.5550 in case the double top is breached, fut the chances are remote. On the bearish front, we recommend selling below 1.5100 with targets at 1.5060 and 1.5000. If a daily close is below 1.5000, real panic will be triggered. The pair broke a 3-week ascending trend line and closed below it. This is not a good sign to bulls.
Trade: selling below 1.5100.
The material has been provided by InstaForex Company – www.instaforex.com