Cable in new lows for the year
Cable or GBP/USD did not finish last week well and has started this week by seeing another dive lower. Taking a look at a weekly chart I can see the following information – we are in new lows for the year and about to hit the 1.2675 September 2021 low. Is this likely to hold? It is possible – the weekly RSI is low (but not showing sign of divergence currently) but the DMI is giving a confirmed sell signal, so for now would probably just go with it but tighten up stops on short positions as that RSI is on the low side.
Second observation is the 200-week ma at 1.3106, is in close proximity to the 1.3160 6th December low and 1.3167 4th April high. Conclusion – the market stays negative below 1.3167 due to the convergence of resistance here.
Third observation - Below the 1.2675 low we have the 61.8% retracement at approximately 1.25, which offers our near-term target and then 1.2030/78.6% retracement (retracements are from the 2020-2021 move). The 1.2075 mid-May low is located in this vicinity and 1.20 is likely to be a psychological support and we will make this convergence of support our short to medium term target.
Fourth observation – the accelerated down channel that the market is currently contained in suggests that downside target could be achieved by late June – i.e., about 6 weeks.
What do these observations add up to? A trading strategy! Somewhere to put your stops, add to the trade and take profits.
Want to learn more about charts? Take a look at the Home Study course from the STA: -
technicalanalysts.com/education/hsc/
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Second observation is the 200-week ma at 1.3106, is in close proximity to the 1.3160 6th December low and 1.3167 4th April high. Conclusion – the market stays negative below 1.3167 due to the convergence of resistance here.
Third observation - Below the 1.2675 low we have the 61.8% retracement at approximately 1.25, which offers our near-term target and then 1.2030/78.6% retracement (retracements are from the 2020-2021 move). The 1.2075 mid-May low is located in this vicinity and 1.20 is likely to be a psychological support and we will make this convergence of support our short to medium term target.
Fourth observation – the accelerated down channel that the market is currently contained in suggests that downside target could be achieved by late June – i.e., about 6 weeks.
What do these observations add up to? A trading strategy! Somewhere to put your stops, add to the trade and take profits.
Want to learn more about charts? Take a look at the Home Study course from the STA: -
technicalanalysts.com/education/hsc/
Disclaimer:
The information posted on Trading View is for informative purposes and is not intended to constitute advice in any form, including but not limited to investment, accounting, tax, legal or regulatory advice. The information therefore has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient. Opinions expressed are our current opinions as of the date appearing on Trading View only. All illustrations, forecasts or hypothetical data are for illustrative purposes only. The Society of Technical Analysts Ltd does not make representation that the information provided is appropriate for use in all jurisdictions or by all Investors or other potential Investors. Parties are therefore responsible for compliance with applicable local laws and regulations. The Society of Technical Analysts will not be held liable for any loss or damage resulting directly or indirectly from the use of any information on this site.
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