The Cable has managed to hold up well above our 2nd tier uptrend line despite broad-based strength of the Dollar. Today's CBI Realized Sales number came in above analyst expectations and is helping buoy the Pound after Friday's disappointing Prelim GDP data. Today's CBI data counters recent flat Retail Sales figures, improving investor outlook a bit as far as consumption is concerned. Investors should also keep in mind that before Friday's shocking GDP number, Britain had released better than expected Services PMI and CCC data. Therefore, the picture may not be as bleak as what Friday made it appear to be. However, U.S. CB Consumer Confidence data is crashing the party since it came in over -10% below analyst expectations. U.S. equities have already taken a hit and the S&P futures are presently testing the patience of their near-term uptrend technicals. If tomorrow's U.S. DGO and New Home Sales releases also disappoint and losses in the S&P accelerate, the Cable may have no choice but to participate due to their positive correlation. On the other hand, near-term uptrend technicals are still hanging on, so positive U.S. econ data over the next couple sessions could knock the Dollar's downtrend back into place. Hence, investors should keep a wary eye on upcoming U.S. data and the reaction from equity markets.
Technically speaking, the Cable is suddenly facing four fresh downtrend lines and 1.65 is serving as a psychological barrier once again. The GBP/USD's last run topped out beneath 9/11 highs, meaning the currency pair has its work cut out for it to the topside since a reversal into a longer downtrend isn't out of the question. As for the downside, the Cable has managed to avoid a retest of 9/21 lows thus far. Our 2nd tier uptrend line should play an importance role in preventing such an occurrence. Meanwhile, though far away, the Cable still has our 1st tier uptrend line to fall back on along with the psychological 1.60 level and previous October lows should the situation deteriorate further. Therefore, the Cable's uptrend is salvageable as long as near-term technical cushions hold up.
Present Price: 1.6319
Resistances: 1.6352, 1.6371, 1.6395, 1.6431, 1.6454, 1.6491
Supports: 1.6304, 1.6285, 1.6265, 1.6247, 1.6233, 1.6205
Psychological: 1.65, 1.60