The cable got away from a 6-week high of 1.5815.Last week, the pair opened at 1.5746 and lost 1.7% by the end of the week. We have been repeatedly advised to book profit or sell with sl 1.5835 from May 14. We forecasted that the pair would be capped between 1.5800 and 1.1835. The pair made a high at 1.5815 and changed its direction towards south. Economic data published last week supported the pound and the lowest CPI was the laggard. Traders were willing to buy the pound on dips. After the UK election, the EU referendum is seen to be the next major event. Mr. Cameron pointed an earlier date in May 2016 then expected 2017.
This week is a data-light week on the UK macro front. The major data fall on Thursday, that is the second reading of GDP q/q. The week started with a bank holiday in the UK and US. We expect soft movements during today's trade.
Weekly technical view: The pair showed a 2-week winning streak lost 1.7% in the previous week. At Friday's session, the cable managed to hold the 20Dsma found at 1.5455 and a low made at 1.5461. The parallel support is found at 1.5446 and 1.5393 that is previous week's low. Before starting the next leg up, we expect the cable to touch 1.5330 and 1.5300. In case bulls lose control at 1.5300, another leg down is expected towards 1.5220 where buying is available. The cable favors buying on dips with sl 1.5100. Bottom fishing is seen between 1.5220 and 1.5150 with sl 1.5100. The cable closes below 200D&Ema favoring the near-term weakness and structural bullish view remains in play. We can observe minor distribution between 1.5700 and 1.5690. Until the cable closes below 1.5700, bears are likely to retest 1.5330 and 1.5300. This is just a normal technical correction after a big jump. The cable closed below the ascending trendline, started making lower high formation. The lower levels of 1.5220 and 1.5150 are expected in case the price closes below 1.5393.
Support: 1.5440, 1.5390, 1.5300
Resistance: 1.5575, 1.5655, 1.5700.
Intraday: The nearest support is found at 1.5446. Bears have a selling opportunity below 1.5440 aiming at 1.5390, 1.5355, 1.5340, and may be 1.5300. Intraday resistance is seen at 1.5525, 1.5600, and 1.5650. Until the price closes below 1.5700, bears have the upper hand. Bulls have a buying opportunity above 1.5525 aiming at 1.5538, 1.5570, and 1.5600. In the extreme case bulls can aim at 1.5660. Bulls will regain the strength above 1.5700.
Trade: Selling below 1.5440 buying above 1.5525