Cable fell to two-day lows circa 1.9600 after the 09:30GMT disclosure of an unexpected UK Q4 GDP downward revision to +0.7% q/q. It was forecast at an unrevised +0.8% q/q. The UK Q4 current account deficit blow-out to GBP 12.7bn, from an upwardly revised GBP 10.5bn in Q3, also negatively impacted the pound. The Q4 C/A deficit was forecast at GBP 8.5/9.0bn.
The recovery rally from those circa 1.9600 lows has run into resistance ahead of 1.9635 (today's Asian session base). Upper obstacles include 1.9669 (today's Asian session peak), 1.9678, 1.9700 and 1.9725. Support points south of 1.9600 are noted at 1.9580 and 1.9560. Stops are tipped below both levels. Option-wise: more 1.9640 strikes, in an estimated GBP 500mn, roll off at today's NY cut (14:00GMT).
There was a GBP 250mn 1.9640 expiry yesterday. UK March house prices have risen by 0.4% m/m and 9.3% y/y, according to 06:00GMT-unveiled Nationwide data. Rises of 0.7% m/m and 9.6% y/y were forecast. Bernanke's Congressional testimony begins at 14:30GMT. US durable goods orders are due at 12:30GMT. Forecast: +3.5% m/m.
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