The cable rejected at 20Dsma at yesterday's session. It was the 3rd consecutive day in a row. As per the recent developments of the cable, the near-term picture turned bearish as the cable is likely to re-test 1.5500.
Earlier in July, the cable broke the 20Dsma, but it is unable to close above that. It seems the near term was capped at 1.5700. A strong close above 1.5620 will bring bulls back on track. They will aim to breach 1.5700. This is likely to open gates to 1.5800 initially.
The cable broke a 3-month ascending trendline being unable to close above that. There are few factors supporting the near term-bearish view.
The 50Wsma is found at 1.5600 and the 20Wsma 1.5270. Bulls must close above 1.5600 this week to retain their momentum the next week.
Recently, the S&P lowered the British 2015 GDP growth forecast to 2.6 % (previously expected growth of 2.8%), but improves the forecast for GDP in the eurozone.
Bulls: The cable gave a break from the bullish broadening wedge closing above that. The trend favors buying on dips with sl 1.5450. The 50Dsma is found at 1.5555 and 100Dems is found at 1.5440.
Intraday support is seen at 1.5600 50Wsma and resistance is found at 1.5650 and 1.5675. Before a further move up, we expect the cable to re-test support levels of 1.5540 and 1.5500. Until the cable trades below 1.5651, the same view remains in play.
Intraday risky buying is available above 1.5670.