The British pound fell sharply after the dismissed housing activity. USD is supported by a series of positive economic data.
IMPACT ON GBP: Construction output growth slowed down moving away from June’s four-month high. Residential building expands at the weakest rates since mid-2013. The headline seasonally adjusted Markit/CIPS UK Construction Purchasing Managers’ Index eased slightly from June’s four-month high of 58.1.
Upcoming events: Ahead of the US jobs data, traders focused on the US dollar. Today, they eye the ADP no-farm employment change, trade balance, and ISM non-manufacturing PMI. Traders do expect wild moves during a day.
Outlook-Earlier, the cable made a strong ceiling at 1.5700. The cable broke the 3-month ascending trendline, as of now still trading below that level. 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 pattern support at 1.5450. The weekly trading pattern is framed between 1.5450 and 1.5700. The cable finally closed above 50Wsma at 1.5535.
Moving averages- The 20& 50Dsma is found at 1.5550, 100Dema is found at 1.5470, 200Dsma is found at 1.5400, 20Wsma is found 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 1.5545, 1.5530, and 1.5500.
Selling is available below 1.5540 with an initial target at 1.5520 and at 1.5490 and 1.5470 later. The selling accelerates only below 1.5520 and a trend is likely to change below 1.5440.
Whenever the cable touches the levels of 1.5675 and 1.5700, it will hit lower low. Initial low was 1.5530 and 1.5467 later. 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.
Trade: Safe selling below 1.5520, buying is above 1.5600 with targets at 1.5630 and 1.5650.
The material has been provided by InstaForex Company – www.instaforex.com