Cable has been a major beneficiary of dollars retreat the past week given a strong performance of its services sector. But with manufacturing still in contraction and inflation pressures easing faster vis-a-vis the US, policy risks still point at the BoE possibly being the first to ease among the major central banks. Ahead we have little in the way of high impact UK data for the week putting focus more on Friday’s US Employment Situation Report.
Resistance
- 1.26065 – Bearish Trend line from March
- 1.25738 – Daily Range Play Floor
- 1.25265 – 38.2 Fib Retracement
Support
- 1.24489 – Friday Low
- 1.24215 – Intraday Consolidation Floor
- 1.23926 – Intraday Consolidation Resistance
Weekly GBPUSD was not quite a bullish engulfing but close, mostly due to where it opened inside the week before it. This has seen weekly oscillators come off oversold levels though we now find ourselves overbought daily and already seeing rejection from 38.2 Fib retracement Friday. For now immediate risk will be a retest of 1.25265 with an intraday close above said level paving the way for further upside to the bearish trendline. A build up of long wicks around the said price and the longer it takes will see us looking for shorts later on. Note too the bearish divergence developing in intraday oscillators.
