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    Technical analysis of GBP/USD for May 21, 2015

    MPC -The Committee made an assumption that the Bank Rate followed the path implied by market interest rates, the stock of purchased assets stayed at 375 billion pounds and the Bank Rate should be maintained at 0.5%.The Committee set monetary policy to meet a 2% inflation target in the medium term and in a way that helps sustain the growth and employment. The Committee judged that the GDP growth would pick up in Q2. The Bank Rate should be maintained at 0.5%.

    Today, traders eye UK retail sales data, printed below expectations in March. CBI industrial order expectations are on the negative side. Beside, US jobs data, existing home sales, and Philly Fed manufacturing index are expected to come positive whereas the flash manufacturing PMI is likely to be on the negative side.

    Technical view: Before the UK's election, the cable changed the direction to north. The recent soft USD and UK's election boosted the pound. Compared to the euro, the pound looks stronger in the fundamental and technical perspective as well. From May 14, we forecasted it would be capped between 1.5800 and 1.5830. The cable fell from 1.5815, while we expected 1.5550 and 1.5500. But the cable made a low of 1.5446 managed to hold the month ascending trend line. This factor helped bulls regain the control. At yesterday's session, the cable managed to pause a 3-day losing streak. The near term is unlikely to favor bulls. At the Asian session, the cable was trading at 1.5558 compared to Wednesday's close of 1.5536. The support is found at 1.5435 and 1.5393 rounded to 1.5390. The 2Wsma is seen at 1.5150. Until the cable closes above 1.5150, use every correction to add on the buying side. The resistance is seen at 1.5600 200Dsma. In case of a daily close above 1.5600, bulls will regain the control aiming at the resistance level at 1.5830. Intraday trade is available on both sides. Bullish momentum is seen above 1.5585 towards 1.5600 and 1.5630. Safe buy will trigger above 1.5600 with an immediate target at 1.5630 and at 1.5670, 1.5700, and 1.5800 later. A daily close is expected above 1.5600 and then only 1.5800. Today, small trading is available for bears below 1.5430 at 1.5400, 1.5393, and 1.5385. In case of a daily close below 1.5400, bears will tighten the grip aiming at 1.5200 and 1.5150.

    Key levels to watch on closing basis:

    Bears must close below 1.5430


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