Pound bulls gave up again posted more than a 1% intraday fall. Bulls lost 50Dsma and 200Dema at yesterday’s session. They had lost 20Dsma earlier.
Ahead of the UK budget release, the British pound is trading lower against USD. UK chancellor Gearge Osborne said he was determined to find 12 billion pounds in the form of welfare cuts in order to meet fiscal targets.
We approached major starting from the UK budget release and FOMC meeting minutes. Thursday is going to be a day when the decision on the bank interest rate is due.
Technical view: last week, the cable closed below 50Wsma at 1.5630, rejected at 1.5780. This week, the cable lost 50Dsma. It is seen at 1.5525 and 200Dema at 1.5550. The same levels are going to act as strong resistance in coming weeks. The nearest support is found at 1.5430 100Dema. At yesterday’s article we forecasted «A daily close below 1.5520 opens gates for 1.5450 and 1.5430 in a day or two, low made 1.5414 on the very same day. The cable fell below the 3 month ascending trend line, testing the fate at 100Dema.”
As we had expected earlier, bulls failed to rebound at the territory between 1.5525 and 1.5430. The alternative is an attempt to rebound from 1.5360. Bulls’ last accumulation point is found at 1.5260 20Wsma and 100Dsma sleeping there. Bulls will face the real problem in case the price closes below 1.5260 opening gated to re-testing of the previous low at 1.5170 and later at 1.5090, 1.5040, and 1.4900.
The intraday resistance is seen at 1.5465, 1.5525, and 1.5550. The support is found at 1.5400 and 1.5360. We do not expect the Fed to deliver a new approach to the rate hike favoring bullish view on the cable. Selling is likely to arrest around 1.5350.
The material has been provided by InstaForex Company – www.instaforex.com