Chart: WorldWideMarkets Alpha Trader
Cable initially fell in the prior Asian market to the session low of 1.6322 from 1.6352 (-30 pips) and made a quick recovery to 1.6350 at Europe’s open. However subtle, the pound has made steady gains in the morning session of Europe to 1.6392 (+50 pips) as the euro-sterling cross fell from 0.8382 to 0.8362 (-20 pips).
In the past six months, cable rose 5.6 percent as traders bought the pound on speculative interest that U.K.’s economy is steadily improving and may prompt the Bank of England to raise their rates or reduce their asset purchasing program in the near term future. We have seen the central banks implement quantitative easing programs with relative ease, but some analysts say removing or lifting QE may be a different story where there may be some unforeseen implications to the global economy.
Apart from cable, the market was fairly quiet and range bound after the U.S. Employment Data from Friday as market participants appear to have taken a breather. Bank of England Governor Mark Carney will deliver a speech later today at the Economic Club of New York.
Support: 1.6320, 1.6294, 1.6277
Resistance: 1.639, 1.6403, 1.6405, 1.6425