The cable managed to pause its 3-day falling streak. It gained 40 pips at yesterday's session. The cable lost 1.3% this week. The pair breached the 50Wsma, but managed to hold above this level. After a strong rally, the British pound looks weak against the greenback. Last Friday, we alert that the cable was approaching the strong supply zone between 1.5930 and 1.6040. The monthly resistance is seen at 1.5935 50Msma. The strong support is found at 1.5800 (previous swing high), 1.5700 (previous swing lower high), and strong support base formed at 1.5440. The level of 1.5667 is done now.
The weekly support is found at 1.5680 50Wsma. It's a litmus test for pound bulls to close above 1.5680. A daily close below this level will lead to a re-test of 1.5620 and 1.5500.
Today, traders eye the BOE governor Carney's speech.
In the hourly chart, the cable has been hitting the lower highs and lower lows.
The cable managed to breach the falling bearish channel in the H1 chart signaling the fresh head room is expected in a day or two. In the four-hour chart, support is found at 1.5640, 1.5590, and 1.5525. Resistance is seen at 1.5770 and 1.5810. Until the cable trades below 1.5770, bears are likely to hold the grip. We advise safe buying above 1.5770 with a target at 1.5800 initially and at 1.5836 and 1.5900 later. The price has been consolidating between 1.5667 and 1.5677 for almost a day indicating that it is preparing a minor pullback ahead of the GDP data release
To contact the author of this analysis, please email- joseph.wind@analytics.instaforex.com
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