Yesterday’s plunge to the 1.3330 level with the subsequent return to the 1.3400 mark points out that fluctuations of the cable are framed by the minor symmetrical . Theoretically, a combination of the weekly and monthly PP strengthened by the 55-hour should a necessary support for a breakout to the top. However, previous trading session showed that traders are rather neglecting these technical indicators. Accordingly, these ups and downs are likely to continue until the pair an impulse from some fundamental event, such as final adoption of tax reform by the Congress. In support of this assumption, the pending orders in 100-pip range are equally split between buys and sells.
Although yesterday’s fluctuations required some adjustments, the main assumption remained unchanged. The cable is continuing to trade in a symmetrical triangle pattern whose upper trend line simultaneously represents the slope of a larger falling wedge formation. From dominant pattern’s perspective the breakout should happen in southern direction towards support zone located between the 1.3338 and 1.3331 marks. Most probably, traders anticipate final adoption of tax bill by the Congress.
However, the pair might prematurely leave the junior pattern if the pressure of 55-, 100- and 200-hour SMAs together with the monthly PP will match with release of better than expected information on the American Final GDP. On the other hand, it should be noted that 56% of pending orders in 100-pip range are set to buy.
The Pound weakened slightly against the US Dollar on Thursday. This fall, however, was brief, as the pair had managed to return to the 1.3340 mark by this morning. Along the way, the combined resistance of the 55-, 100– and 200-hour SMAs was surpassed with little hindrance.
The Pound is approaching a short-term trend-line located circa 1.34. It is likely that this line together with the aforementioned support pressure the rate from both sides in this session.
Nevertheless, fundamentals scheduled for this session could introduce some changes to this assumption. Apart from the trend-line, the nearest resistance is set by the weekly R1 at 1.3421, while the southern barrier is likewise reinforced by the weekly and monthly PPs.