China devalued Yuan while Crude fell below $40 a barrel and this what happened with the price of Cable – more than 350 pips fall in just two days. The GBPUSD hit the low of 1.5451 yesterday following the release of US durable goods report. The technical bias however remains bullish because of a Higher High and Higher Low in the recent wave.
As of this writing, the pair is being traded around 1.5490. A support can be noted around 1.5423, the swing low of the recent downside wave ahead of 1.5353, the 76.4% fib level as well as major horizontal support as demonstrated in the following daily chart.
On the upside, the pair is expected to face a hurdle near 1.5552, the 50% fib level ahead of 1.5641, the 38.2% fib level and then 1.5818, the swing high of the last major upside rally. The technical bias will remain bullish as long as the 1.5423 support area is intact.
US Durable Goods Orders
Orders to U.S. factories for long-lasting manufactured goods rose in July, and demand in a key category that tracks business investment plans jumped by the largest amount in 13 months. The Commerce Department says orders for durable goods increased 2 percent in July after a 4.1 percent gain in June. Orders in a category that serves as a proxy for business investment increased 2.2 percent in July following a 1.4 percent rise in June. These orders had fallen in four of the previous five months, reflecting the soft patch that manufacturing has faced this year.
Considering the overall technical and fundamental outlook, buying the cable around 1.5450 support area appears to be a good strategy if we get a major bullish reversal on daily chart.
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