GBP/USD surged more than 60 pips in Asian session on Monday and then found a strong resistance around 1.6430-40 region which is 38.2% fib level of last major move (2.1160 to 1.4539) as well as monthly trendline resistance.
Resistance & Support Levels
At the moment spot is around 1.6413 where it is likely to find immediate support at 1.6380 ahead of 6257 (old resistance area turned into support). Bias shall remain bullish on cable until it breaks and closes below 1.6257 support.
On upside, immediate resistance is seen at 1.6440 (daily high) ahead of 6453 (29 Aug 2011 high) and then 1.6500 (psychological level), beyond there,1.6572 (23 Aug 2011 high) will be the next port of call, with 1.6617 (19 Aug 2011 high) a distant target. So we have two crucial levels this week:
1.6430-1.6440: Resistance Zone
1.6257: Support Zone
A close above 6440 will accelerate the ongoing bullish trend amid renewed buying interest while a daily close below 1.6257 my turn the bullish bias into bearish.
We have some very important fundamental events due this week:
Today: Federal Reserve Chairman Ben Bernanke is to speak at an event in Washington. Later, the Institute of Supply Management is to release its manufacturing PMI.
Tomorrow: The U.K. is to release its construction PMI.
- U.K. services PMI, a leading indicator of economic health
- U.S. ADP report on private sector job creation
- US services PMI
- US new home sales data
- US trade balance report
- BoE Interest Rate & Stimulus Decision
- U.S. revised estimate of third quarter gross domestic product
- U.S. initial jobless claims
- U.S. factory orders
- US consumer sentiment index
- US nonfarm payrolls and the unemployment rate.
Tapering or No Tapering?
Bernanke’s today speech is of high significance that investors will be monitoring very closely for hints/comments about earlier than expected tapering, dovish remarks by Fed chairman may push the US Dollar into negative territory and vice versa.