Support – 1.4684, 1.4636, 1.46
- Pair ran out of steam at a high of 1.4740 earlier today, following which a drop to 1.4677 was seen. The pair is now trading around 1.4708 levels, which is the leg D of the drawn on the .
- The hourly chart also suggests a price divergence has been formed, thus making 1.4740 a strong resistance.
Focus on US durable goods data
US durable goods orders data is scheduled for release today. Corporate spending is expected to have slowed down in April . The focus is likely to be on capital goods non defense ex aircraft orders, which if strong could overshadow even a weak headline figure and lend support to the US dollar .
Note that June rate hike bets stand around 38% and could near 50% if the durable goods figure is strong. That would also trigger speculation of hawkish comments from Fed’s Yellen tomorrow.
- Thus, a strong durable goods data could push GBP/USD pair lower towards 1.4636 given 1.4708 is leg D of cipher pattern + there is price divergence on the hourly.
- On the other hand, a horribly weak durable goods report could see the pair take out 1.4740, and move towards 1.4770 levels.