The Cable is consolidating above our 2nd tier uptrend line after the BoE decided to keep its monetary policy unchanged as it monitors what impact the present QE package will have on overall economic performance. Meanwhile, bulls are trying to keep the Cable's head above water as the EUR/USD and gold undergo similar consolidative patterns. Today's bounce in the Cable hasn't been too much to speak of thus far, indicating recent downward pressures are still intact. That being said, volatility could pick up in the next 24-48 hours as investors await key data releases from China and the U.S. China will print a set of data during the Asia trading session, including Industrial Production and Trade Balance figures. Continual outperformance by China's economy could deliver a much needed boost to the risk trade and help the Cable regain its footing. Following China's key data releases, Britain will print its PPI input data. Pricing is an important factor for the BoE when it is deciding upon its monetary policy. Hence, a pickup in PPI could encourage the BoE to keep its QE package as is in the future should prices recover. During the U.S. session, America will release Retail Sales and UoM Consumer Sentiment. Both data points can move markets should they surprise on either side, so investors should remain alert.
Technically speaking, the Cable has dipped below key November lows and is presently testing our 2nd tier uptrend line. Hence, a downward pressure remains on the Cable. That being said, the currency pair does have our 1st and 2nd tier uptrend lines serving as technical cushions along with the psychological 1.60 area should it be tested. As for the topside, the Cable faces multiple downtrend lines due to recent weakness. Additionally, the Cable has 12/07 and 12/04 highs serving as technical barriers along with the psychological 1.65 level.
Present Price: 1.6245
Resistances: 1.6246, 1.6260, 1.6284, 1.6325, 1.6346, 1.6371
Supports: 1.6211, 1.6186, 1.6163, 1.6133, 1.6113, 1.6098
Psychological: 1.60, 1.65
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