The cable has been sustaining losses for the third day as well. After a strong rally, pound bulls look tired. Data on existing home sales and new home sales supported greenback bulls. Recent data on the GDP firmly held the bearish grip.
The cable is trading below 100& 50Wema.The cable rejected at 50Msma last week. We have been advising cautious for more than 5 days that the cable approached the strong supply zone between 1.5930 and 1.6040. The monthly resistance is seen at 1.5935 50Msma. Last Friday, we forecast: "We expect the pair to go through the healthy correction before further move upwards. The strong support is found at the previous swing high of 1.5800, 1.5700, and strong support base formed at 1.5440". Now, the level of 1.5667 is done. The pound decreased against the greenback this week on the back of strong US data.
The weekly support is found at 1.5680 50Wsma. The litmus test is expected at 1.5680. Pound bulls need to close above this level. A daily close below it will lead to a re-test of 1.5620 and 1.5500. Today's trade depends on data from the US. We expect the price to re-test the levels of 1.5540 and 1.5500 initially before further moving upwards.
In the hourly chart, the cable has been moving towards lower highs and lower lows. The hourly support was lost. In the four-hour chart, support is found at 1.5620, 1.5560, and 1.5510. Resistance is seen at 1.5715, 1.5760, and 1.5800.The trend favours selling on rises with sl 1.5800. We advise safe buying above 1.5820.
To contact the author of this analysis, please email- joseph.wind@analytics.instaforex.com
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