15.05.201402:16 Forex Analysis & Reviews: Technical analysis of GBP/USD for May 15, 2014

GBP/USD

A series of the UK economic data was released yesterday. The unemployment rate fell to a 5-year low. The rate fell from 6.9% to 6.8%, exactly what we estimated. The BoE clarifies regarding the interest rates they are not in a hurry to raise the interest rates. We expect the performance of the UK will become stronger in the future as well as the recent performance. In yesterday's session, the cable was beaten to a 3-week low after the rate hike hearsay.

The pair takes support at the lower trend line on the weekly chart, it's a good sign to pull back from the oversold levels. The yesterday's low was very crucial for the rest of the week. Bulls need to hold this low, if not it will drift up to 1.666 levels.

The cable is trading in a bearish zone, it has been making lower lows and lower highs for the last 6 days. The near strong support exists at 1.672 (50daily SMA) on the down side. The bulls need to hold this level on a closing basis, if not, they will give up for 1.666 levels. On the up side, 1.6874 is the initial resistance to cross. The daily RSI indicates still selling on rallies.

Intraday-

In Asia's trading session the pair is trading at 1.6767 levels. The hourly momentum indicators still favors pullback side from the oversold levels. It looks a safe buy at the 1.672 levels. On the down side, the pair has strong technical support at 1.672 levels. On the up side, it has strong resistance at 1.6795, above this, 1.6835, 1.6858 and 1.6883 levels. Traders can start buying at 1.6740 levels up to 1.672 and hold patiently with sl 1.672 on a closing basis. Trading above the 1.6763 is good on an hourly basis.

Recommendations- cmp 1.6767.

Risky traders, buy at cmp 1.6767 with targets at 1.6795, 1.6828, 1.6850,1.6864 and 1.6883.

Safe traders please wait for 1.674 levels or buy above 1.68 levels.