Richard Perry
Independent Analyst
Cable endured a downside break on Friday and the early price action of this week would suggest there is further weakness that will be seen. The loss of support at $1.4532 opened levels not seen since 2010 and this makes it ever more likely now for a retreat back towards the next key low at $1.4230. There is minor support at $1.4345 but the downside is now open. The concern for the sterling bulls is that momentum indicators have deteriorated sharply and are now in full negative mode. This would suggest that any rallies are likely to be sold into now. This is what we have seen over the past 3 trading days with intraday rallies of perhaps between 50/80 pips before the sellers move back in again. It might also be worth keeping an eye on the falling 21 hour moving average (at $1.4625) which has become a basis of resistance. As the bears have started again this morning to leave resistance at $1.4650, any rebound towards $1.4615/$1.4650 is a chance to sell. First big resistance comes in at $1.4725/$1.4735.
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