Daily Technical Analysis:
GBP/USD has tested SMA5 and SMA10 yesterday and there is 28 days lagging in SMA15. Market SMAs are squeezing and contracting in bullish sequence, whereas GBP is moving between SMA5 and SMA15.
RSI is showing decreasing Bullish strength with 66% reading. RSI is now moving in downtrend with a downward direction below resistance (70%).
Upper band is moving straight, while middle and Lower bands are moving upward direction with squeezing bands. Market is moving between upper and middle band.
With Lutfi Magnet Theory market is 80% bearish, while with adjustments 90% Bearish. Lutfi magnet theory and adjustments are showing bearish sentiments.
Concluding all Technical Analysis initial bias is bearish for correction, where it may attempt low at SMA15 1.6147, and break there may move downward to support level at 1.6100. While on higher side break of support turned resistance level at 1.6200 may attempt high at weekly magnet 1.6235.
The British Pound was lower against the U.S. Dollar on Wednesday.
The pound was trading close to 13-month high giants the U.S. dollar on Tuesday, as hopes for progress in handling the euro zone’s debt crisis slightly lifted sentiment, although concerns remained.
Sentiment strengthened after Germany’s Finance Minister Wolfgang Schauble said European policymakers should do everything in their power to protect the single currency and said defending the euro was “worth any effort”.
Investors remained cautious however, amid German media reports that lawyers for the German central bank are examining the legality of the European Central Bank’s bond purchasing program, setting the stage for a possible legal challenge.
In the U.S., the Conference Board said that its index of U.S. consumer confidence rose to 70.3, from 61.3 the previous month whose figure was revised up from 60.6. Analysts had expected CB consumer confidence to rise to 63.0 last month.
Also Tuesday, data released by the British Bankers Association showed that the number of mortgage approvals in the U.K. rose unexpectedly in August. The BAA said mortgage approvals totaled 30,533 in August, up from an upwardly revised 28,800 in July. Economists had forecast approvals to fall to 28,600 in August.
Here is schedule for today’s important data:
BOE Credit Conditions Survey at 01:30pm. This BOE report is released each quarter. It examines credit conditions for households and small businesses. The report is an important indicator of consumer and small business spending and confidence.
CBI Realized Sales at 03:00pm. The August release was terrible, plunging to -3 points. The markets are predicting a much better reading this month, with a forecast of 6 points.
Nationwide HPI: 27th-31st Tentative. This important housing inflation reached its highest level in three years in August, climbing 1.3%. The market forecast for the September release is much lower, with an estimate of a modest 0.2% gain.
US New Home Sales at 07:00pm. Sales of new homes edged up 3.6% in July reaching 372,000 units, following another good reading of 359,000 units in the previous month. Analysts predicted an increase to 363,000 confirming the recovery trend in the housing market. A further rise to 381,000 is forecasted.
GBP/USD opened yesterday at 1.6216. The pair first attempted high at 1.6266 and then retraced back to low at 1.6181. The pair closed the day at 1.6184