Over the past few days I have been increasingly talking about the key role of support that the 89 day moving average (now $1.6893) has played on Cable throughout 2014 and yesterday the rate hit the support. Now, the technician in me is desperate for this to once again come in and provide a floor for the price as it has done on each of the three other major corrections this year. The problem is that if it starts to break down then I think we could be in the process of a major change of outlook for Cable. The sell-off is now into the 12th day but is showing initially positive signs in Asian trading. Incredibly, as with EUR/USD, on the intraday hourly chart it is the 89 hour moving average (now $1.6954) which seems to be the basis of resistance for the rallies/consolidations. Again, intraday momentum simply looks to just be unwinding from an oversold position currently. There is a resistance band $1.6930/$1.6955 which needs to be overcome and if this can be seen then the prospect of a meaningful recovery can begin. If the downtrend continues then the next support is not until $1.6844.

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