After edging lower to 1.1345, the euro edged higher against the greenback. The British pound edged up to 1.5389. At yesterday's session, we forecasted the UK trade data to be narrow, which is positive for the pound.
The UK trade deficit in goods and services totaled 1.2 billion British pounds in April 2015, compared with 3.1 billion British pounds in March 2015. In April 2015, the trade deficit in goods narrowed by 2.1 billion British pounds. This reflects both an increase in exports and a decrease in imports.
Upcoming event: The major economic events are due at today's session. Traders eye manufacturing production, NIESR GDP estimate, and BOE governor's speech. We expect positive readings for manufacturing production data.
Technical view:Ahead of the BOE governor Carney's speech, the pound is trading on a verge of a break on the higher side. The pair has been trading in a falling bearish channel for almost 3 weeks. Earlier we forecasted that the cable could breach the resistance at 1.5440. In case bulls manage to close above the descending trendline, we will expect 1.5700 in a day or two. This view is supported by weakness in the greenback. We have been recommending bullish view with sl 1.5170. The monthly support is found at 1.5089. A real problem for bulls looms only below 1.5080.
Intraday resistance is seen at 1.5400, 1.5415, and 1.5445. Support is found at 1.5375 and 1.5345. The trade favors buying with sl 1.5300, safe buying is expected above 1.5400 with targets at 1.5415 and 1.5440. Bulls are likely to gain strength above 1.5445 1.5470, and 1.5510. Selling opportunity is seen below 1.5300 with targets at 1.5260, 1.5225, and 1.5200. Use dips to buy with sl 1.5170. Instead of selling, use a dip to buy or buying above resistance following the trend.
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