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    IronFX Essential Intraday Comment | 07/07/2015

    • The dollar traded higher against almost all of its G10 peers during the European morning Tuesday, ranging from 0.30% against CAD to 1.20% vs NOK. The greenback was virtually unchanged only against JPY.

    • The British pound surrendered to the strong dollar even after the country’s industrial production rose unexpectedly in May. IP growth accelerated to 0.4% mom from 0.3% mom previously, beating expectations of -0.2% mom. The positive surprise provides further reassurance that the country’s economic recovery managed to gather momentum in Q2 and remains on track. If the data holds steady in June, we would probably see a rebound in Q2 growth that could bring expectations for rate hike closer and strengthen GBP.

    • Nonetheless GBP/USD tumbled during the European morning Tuesday, falling below the support (now turned into resistance barrier) of 1.5540 (R1). The rate is now headed towards the 1.5485 (S1) hurdle, where a decisive dip could pave the way towards our next support of 1.5415 (S2), defined by the low of the 11th of June. After the downside exit of the short-term range that had been containing the price action from the 23rd of June until the 1st of July, the short-term outlook has turned negative. Our short-term oscillators support further declines as well. The RSI slid after hitting resistance at its 50 line and now appears ready to move below 30, while the MACD, already negative, has just fallen below its trigger line. Switching to the daily chart, I see that the rate is still trading above the 80-day exponential moving average and there is still the possibility for a higher low near that moving average. As a result, I would consider the overall picture to stay somewhat positive and I would treat any further short-term declines as a corrective phase.

    • Support: 1.5485 (S1), 1.5415 (S2), 1.5360 (S3)

    • Resistance: 1.5540 (R1), 1.5630 (R2), 1.5675 (R3)

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