The Cable is gravitating towards our 2nd tier uptrend line, trading well off intraday highs after weaker than expected retail sales and weekly unemployment claims data from the U.S. Meanwhile, it appears the Cable's positive correlation with U.S. equities is back in play as is the EUR/USD's. However, despite the GBP/USD's recent bounce, we haven't witnessed considerable buy-side volume while two downtrend lines and the psychological 1.70 level bear overhead. Therefore, there remains noticeable near-term downward pressure on the Cable. It seems investors could continue their directional debate with the S&P futures trading back at their highly psychological 1000 zone. We wouldn't be surprised to see the GBP/USD continue to creep higher towards 1.67 as our 3rd tier uptrend line and 2nd tier downtrend lines approach their inflection point. We recognizing an oncoming inflection point in gold as well, indicating the trading week could end on a volatile note.
Economic data will be quiet on the British front for the remainder of the week, leaving the GBP/USD's performance dependent on its positive correlation with U.S. equities. Wednesday's CCC number and Britain's slight rise in its headline unemployment rate show the rapid improvement in the UK's labor market is leveling off. Therefore, the Pound could experience relative weakness over the next couple trading sessions, especially if the EU's CPI data can beat expectations as did today's GDP releases. Technically speaking, The GBP/USD must confront our 3rd tier and 2nd tier downtrend lines along with the psychological 1.67 level and June 30th highs. As for the downside, the Cable has our 1st and 2nd tier downtrend lines to rely upon along with intraday lows and the highly psychological 1.65 area.
Present Price: 1.6592
Resistances: 1.6611, 1.6632, 1.6648, 1.6665, 1.6702
Supports: 1.6561, 1.6543, 1.6524, 1.6505, 1.6472