The Cable has stabilized along our 1st tier uptrend line and is consolidating as investors await UK CB Realized Sales followed by U.S. New Home Sales and the Fed's monetary policy decision. Furthermore, Obama will deliver his State of the Union tonight with possible budget proposals in the mix. Hence, investors will have plenty to digest and this could lead to additional volatility in the FX markets. Britain's disappointing GDP data sent the Pound reeling yesterday, so it will be interesting to see how today's realized sales number pans out. Although the Cable has managed to stabilize, a weaker than expected CB release could send the Cable a step lower. Meanwhile, our 1st tier downtrend line is approaching an inflection point with our 1st tier uptrend line, meaning activity in the Cable could pick up soon. That being said, investors should pay close attention to gold and the S&P futures, particularly gold's ability to hold above previous January lows. A pullback in gold and/or equities could signal another leg up in the Dollar due to correlative forces.
Technically speaking, despite yesterday's setback in the Cable the currency pair still has multiple uptrend lines serving as technical cushions along with 1/22 lows and the psychological 1.60 level should it be tested. As for the topside, the Cable faces multiple downtrend lines along with 1/04, 1/21 and 1/15 highs. Therefore, although the Cable's uptrend line has been dealt a blow today, the currency pair still has some wiggle room on both sides.
Present Price: 1.6136
Resistances: 1.6143, 1.6170, 1.6195, 1.6223, 1.6247, 1.6264
Supports: 1.6119, 1.6092, 1.6073, 1.6048, 1.6023, 1.6001
Psychological: 1.60, 1.65, January highs and lows