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.