Chart: WorldWideMarkets Alpha Trader
Cable became toppish at the intraday high of 1.4865 prior to the European open. However, sterling was sold off immediately as the European market went underway as fears about the Scottish National Party leader comment became the factor for the 125 point drop of the price to 1.4740. The UK general election will be held on May 7, 2015.
The SNP leader Sturgeon said he refused to rule out another Scottish independence referendum before 2020. The last national referendum was held in Scotland on Sept 18, 2014 and the "No option won by 55.3% of votes compared to 44.7% of Yes option to separate from the UK.
Euro-sterling rose sharply from 0.7230 to 0.7298 which added weight to the pound.
UK's March CIPS Manufacturing PMI came out slightly better than expected at 54.4 versus the 54.2 estimate. However, the data was overshadowed by the SNP leader's hawkish comments. An independent Scotland would not only add to burden the UK's budget deficit and weaken the UK economy, but there would be many implications to the sound political and financial structure in the UK.
The 14-day moving average showed a well rounded resistance at 1.4860 breaking the support at 1.4820 to test the support at 1.4750. We see a 50% retracement to 1.4820. Expect a thin trading day tomorrow as the Easter Holiday begins Thursday to Easter Monday.