The cable managed to hold the support zone closing with marginal gains.
IMPACT OF GBP: The UK services sector remains on strong growth path. The employment number is rising at the weakest rate since March 2014. Readings for new business is growing, but the long-term outlook was cut to a five-month low.
The Business Activity Index fell to 57.4 in July from 58.5 in June.
Upcoming event: Today is a big day for the cable.
UK- Manufacturing production and BoE interest rate is due.
US- Unemployment claims are due.
We expect the BoE the hold its interest rate at 0.50%. The manufacturing PMI data has beeb descauriging traders during the last 2 months. This time, we expect positive readings.
Technical view: The cable managed to close above all moving averages in the daily chart and above 20&50Wsma. The support zone is found at 1.5570 50Dsma, 1.5535 50Wsma, 1.5480 100Dsma, and 1.5380 20Wsma. At yesterday’s session, the cable initially fell below the 50Wsma, but managed to rebound by the end of the day.
The supply zone remains between 1.5650, 1.5675, and 1.5700. A daily close above 1.5700 is likely to enable bulls to aim for 1.5770 initially and for 1.5860 and even 1.5900 later. Earlier, the cable made a strong ceiling at 1.5700.
Bullish developments- . The cable has been reaching higher lows within the weekly pattern support found at 1.5450. The weekly trading pattern is framed between 1.5450 and 1.5700. The cable finally closes above 50Wsma.
Intraday – Intraday resistance is seen at 1.5635, 1.5650, and 1.5675. Support is found at 1.5600, 1.5590, and 1.5570.
Sell below 1.5560 with a target at 1.5530initially, and 1.5490 and 1.5470 later. Selling will accelerate only below 1.5520, and the trend is likely to change below 1.5440.
Whenever the cable had touched the levels of 1.5675 and 1.5700, it hit lower lows (1.5530 and 1.5467). We can expect 1.5450 or 1.5410. In case of a daily close above 1.5700, bulls will aim for 1.5780 in a day or two.
Trade: Safe selling is expected below 1.5520.
The material has been provided by InstaForex Company – www.instaforex.com