Cable saw a modest bounce Thursday following its sharp sell-off on hawkish talk for the US the day prior. We have little to watch out for out of the UK today though US Personal Consumption Expenditure data is worth keeping an eye on given that it is actually the Fed’s preferred gauge of inflation given its broader coverage, including expenses by nonprofit organizations that serves households. Any bump up in the number could be seen as reinforcing the hawkish camp delaying the start of US easing.
Resistance
- 1.28628 – Intraday Consolidation Resistance
- 1.28007 – High for the Month
- 1.27472 – Yesterday High
Support
- 1.26728/808 – SHS Pattern Trigger
- 1.26430 – Intraday Consolidation Low
- 1.25841/949 – 50D Moving Average / Consolidation Lows
GBPUSD has a bearish divergence in the daily charts that appears to be in the process of starting a reversal, but things are more interesting in the 4H level with its head and shoulder pattern. Trigger for this appears to be our range play lows for the past two weeks at the 1.26728/808 area break of which could open the way down to the 1.25841/949 region where we find the 50D Moving Average and Consolidation lows for the December/January period. Note that with the intraday stochastic coming off overbought levels, we will consider shorting at market for a test of the neckline.
