GBPUSD: Short term momentum indicators look neutral now
|GBPUSD: 1.3433
Cable chopped around above the week’s trend lows, but held on above 1.3400, with most of the volatility coming while the Inflation Report Hearing was being delivered. Unable to reverse its trend though, with a fairly benign outlook from the BOE Members, Cable is closing towards its lows.
1 hour/4 hour indicators: Neutral.
Daily Indicators: Possible basing formation.
Weekly Indicators: Turning lower
Preferred Strategy: The short term momentum indicators look neutral now, and the dailies may be forming a base, so a cautious stance is required, with direction to be decided today by the release of the CPI, PPI, and RPI. (CPI, exp 0.5%mm, 2.5%yy; Core, exp 2.2%yy).
On the downside, support will be seen at 1.3390/1.3400, where the major Fibo level at 1.3398 should see decent buying interest again. A break of 1.3390 would allow a run to 1.3300 and possibly to 1.3220, with not a lot of support to stand in its way, and some soft data could see a move towards that level quite quickly.
If Cable does manage a squeeze higher, near term resistance will again be seen at 1.3450 ahead of the session high at 1.3490. Above here, 1.3500/10 and then 1.3525 will see sellers ahead of the 200 DMA at 1.3550 and to the 15 May high of 1.3571 ahead of 1.3600/10.
Sidelined.
| Resistance | Support | ||
| 1.3550 | 200 DMA | 1.3412 | Session low |
| 1.3525 | 18 May high | 1.3398 | (38.2% of 1.1822/1.4376) |
| 1.3510 | 200 HMA | 1.3390 | 21 April low |
| 1.3491 | Session high | 1.3370 | Minor |
| 1.3445 | Minor | 1.3350 | Minor |
Economic data highlights will include:
UK CPI, PPI, RPI – Apr, CBI Distributive Trade Survey Orders/Realised – May
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