The UK released the construction data which turned out to be quite strong in January. The construction PMI index rose to 59.1 from a 17-month low at 57.6 in December. The cross has been consolidating for 4-weeks at 50Wsma. This week, the pair touched the 50Wsma and started reinforcement. After 8-weeks, the cross looks stronger. On the weekly chart, we can observe where exactly the pair touched the 50Wsma, it bounced from there and made a new high. In Monday's articles, we recommended buying above 177.70 with the targets at 178.20 and 179.40. At the early Asian session, the pound made a high at 178.38 against the yen, but was unable to breach the previous day's high. In case if the prices breach 178.38, bulls can challenge 178.55, 178.90, and 179.40. We recommend fresh buying above 178.40. We recommend putting long positions with a sl at 50Wsma or 175.45 on a weekly closing basis. On the weekly chart, the pair closed below the 20Wsma and made a minor double top at 180.53. Until the pair trades and closes above 177.10 and 177.00, use dips to buy which will be gainful in the intraweek. Intraday support exists at 178.00, 177.60, and 176.90. The prices gave an upside breakout from the falling expanding wedge pattern on the hourly chart. Today, the focus has shifted to UK's services PMI data. We are expecting an uptick from the data. In case if the positive readings take place, we can expect 179.40 in a day or two.
The material has been provided by InstaForex Company - www.instaforex.com
