GBP/USD – 1.4549 is a strong hurdle, eyes Carney testimony
Resistance – 1.45, 1.4549, 1.46
Support – 1.4443, 1.4413, 1.4375
Hourly chart pattern – Falling trend line intact
Cable jumped to 1.4549 but failed to take out the same and fell to an intraday low of 1.4442 levels before recovering to end the day at 1.4483 levels. The day end closing kept the rising trend line (drawn from Apr 6 low – Apr 14 low) support on the daily chart. The spot currently trades around 1.4481 (hourly 200-MA).
Outlook
Carney’s second round with pro-Brexit lawmakers
The Bank of England governor will testify at 10 a.m. in London on Tuesday, alongside Deputy Governor Ben Broadbent and fellow officials Martin Weale and Gertjan Vlieghe. This is Carney’s second encounter with pro-Brexit lawmaker Jacob Rees-Mogg and a last one before referendum.
Carney was accused of acting politically and compromising the independence of the BOE during his last testimony. A heated exchange between Carney and pro-Brexit lawmaker won’t be surprising. Traders can expect Carney and Co. to warn about negative impact of Brexit and bank’s readiness to provide more stimulus if BRexit pushes UK into recession.
Note that so far, 280 economists have signed up to a letter opposing an exit.
Support – 1.4443, 1.4413, 1.4375
Hourly chart pattern – Falling trend line intact
Cable jumped to 1.4549 but failed to take out the same and fell to an intraday low of 1.4442 levels before recovering to end the day at 1.4483 levels. The day end closing kept the rising trend line (drawn from Apr 6 low – Apr 14 low) support on the daily chart. The spot currently trades around 1.4481 (hourly 200-MA).
Outlook
- Pair’s break below hourly 200-MA at 1.4481 coupled with hourly RSI below 50.00 would add credence to falling trend line formation and expose 1.4443 levels, where a violation would increase risk of a drop to 1.4413-1.44 levels.
- On the other hand, rebound from hourly 200-MA followed by a break above 1.45 would shift risk in favor of a re-test of 1.4549 (23.6% of 1.3835-1.4770).
- However, bearish invalidation is seen only if prices see hourly closing above 1.4549 levels.
Carney’s second round with pro-Brexit lawmakers
The Bank of England governor will testify at 10 a.m. in London on Tuesday, alongside Deputy Governor Ben Broadbent and fellow officials Martin Weale and Gertjan Vlieghe. This is Carney’s second encounter with pro-Brexit lawmaker Jacob Rees-Mogg and a last one before referendum.
Carney was accused of acting politically and compromising the independence of the BOE during his last testimony. A heated exchange between Carney and pro-Brexit lawmaker won’t be surprising. Traders can expect Carney and Co. to warn about negative impact of Brexit and bank’s readiness to provide more stimulus if BRexit pushes UK into recession.
Note that so far, 280 economists have signed up to a letter opposing an exit.
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