The UK's manufacturing PMI data was unable to support the pound, erased Friday's gains. The triple top is formed between 1.5675 and 1.5700.
IMPACT ON GBP:
The UK manufacturing sector remain relatively subdued in the third quarter. Although the headline seasonally adjusted Markit/CIPS Purchasing Manager's Index edged higher to 51.9 in July from a 26-month low of 51.4 in June, it remained below the average for the current sequence of growth that began in April 2013 (54.3).
IMPACT ON USD:
Economic activity in the manufacturing sector expanded in July for the 31st consecutive month, and the overall economy grew for the 74th consecutive month, say the nation's supply executives.
Outlook: Earlier the cable made a strong ceiling at 1.5700. The cable broke the 3-month ascending trendline, but it is still trading below that. In the four-hour chart, the cable fell below the bearish h&s pattern.
Bullish developments: The cable has been reaching higher lows in the weekly chart; support is found at 1.5450. The weekly trading pattern is framed between 1.5450 and 1.5700. After 5 weeks, the cable has finally closed above 50Wsma. In case of a daily close above 1.5700, bulls will head towards 1.5780 in a day or two.
Moving averages: The 20& 50Dsma is found at 1.5550, 100Dema is found at 1.5470, 200Dsma is found at 1.5400, 20Wsma is seen at 1.5380, and 100Dsma is found at 1.5320.
Intraday: Intraday resistance is seen at 1.5600, 1.5620, and 1.5650. Support is found at 1.5580, 1.5560, and 1.5550.
Selling is available below 1.5550 with an initial target at 1.5530 and 1.5490 and 1.5470 later. Selling is expected to accelerate only below 1.5530 and trend will change below 1.5440.
Whenever the cable touches the zones of 1.5675 and 1.5700, it will hit a lower low. This time, we can expect 1.5450 or 1.5410. A daily close above 1.5700 will enable bulls to aim for 1.5780 in a day or two.
The material has been provided by InstaForex Company – www.instaforex.com