Richard Perry
Independent Analyst
The negotiation of the crossroads for Cable that I mentioned yesterday is still in question after the sharp two days of gains could not penetrate the 21 day moving average resistance (at $1.5165). The RSI has stalled its advance in the mid-40s, and more interestingly, the resistance as shown on the intraday hourly chart around $1.5200 is still a key factor. The hourly chart shows that although there have been two attempts in the past two days to breach $1.5200 there has never been a decisive break. Even on the volatility of the FOMC announcement last night the resistance held firm. We are now in a position where the hourly momentum has lost impetus and is becoming a drag on sterling. Unless the bulls can muster the resolve to push for a decisive break of $1.5200 (i.e. a consistent trading phase above the resistance for at least a few hours) then the overhead pressure and lack of momentum could begin to pull Cable lower again. Resistance is at $1.5222 and then $1.5269. Initial support comes in at $1.5115 and then $1.5060.
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