Daily Technical Analysis:
GBP/USD has tested SMA5 and SMA10 yesterday and there is 27 days lagging in SMA15. Market SMAs are squeezing and moving in bullish sequence, whereas GBP is moving slightly above all three SMAs.
RSI is showing decreasing Bullish strength with 74% reading. RSI is now moving in uptrend with a slight downward direction above resistance (70%).
Upper, middle and Lower bands are moving upward direction with expended bands, providing support to bullish volatility. Market is moving between upper and middle band.
With Lutfi Magnet Theory market is 60% bearish, while with adjustments 160% Bearish. Lutfi magnet theory is showing bearish sentiments, While adjustments are suggesting there is due correction in GBP.
Concluding all Technical Analysis initial bias is bullish with correction, where it may attempt low at support level 1.6200, and break there may move downward to last week low at 1.6162 and below there may move to SMA15 1.6132. While on higher side break of yesterday’s high at 1.6248, may attempt last week high at 1.6308.
The pound remained lower against the U.S. dollar on Monday, as sustained concerns over the debt crisis in the euro zone dominated market sentiment, weighing on demand for riskier assets.
Risk sentiment weakened after a report earlier showed that Germany’s Ifo business confidence index deteriorated to the lowest level since March 2010 this month, amid ongoing concerns over euro zone’s debt crisis.
The German Ifo business climate index fell to 101.4 from 102.3 in August, the fifth monthly decline in a row, compared to expectations for a reading of 102.5.
Meanwhile, uncertainty over whether Spain will request a full scale sovereign bailout weighed. Over the weekend, Spain’s economy minister said the country would not rush to seek external financial aid, as pressure mounted on Spain to seek a bailout. And concerns over Greece persisted as Athens prepared to present a package of spending cuts demand by international lenders to euro zone officials at the end of this week, amid fears that the country’s budget shortfall could be larger than expected.
Here is schedule for today’s important data:
BBA Mortgage Approvals at 1:30pm. Mortgages Approvals is a leading indicator of demand in the housing sector. The markets are expecting little change in the September release.
US CB Consumer Confidence at 07:00pm. US Consumer Confidence declined August to 60.6 from a revised65.4 in July in light of worries about the weakening job market. The reading was well below predictions forecasting an increase to 65.8. An increase to 63.2 is predicted now.
GBP/USD opened yesterday at 1.6235 with a thin range day of 70 pips and consolidated around 1.6180 and 1.6250. The pair first attempted high at 1.6248 and then retraced back to low at 1.6180. The pair closed the day at 1.6218.
GBP/USD opened today at 1.6216.