Richard Perry
Independent Analyst
There was also a strong rebound on Cable yesterday which has allowed the technicals to unwind far more than the Euro. The RSI and Stochastics have both shot higher in the past couple of sessions as sterling has rallied around 350 pips in three days. This could now be a key near/medium term crossroads. The RSI is at 45 (the big rallies within the downtrend have tended to get to the mid to high 40s on the RSI before the sellers return). The 21 day moving average (currently at $1.5187) has also been a good basis of resistance through the downtrend. Furthermore, the intraday hourly chart shows an interesting pivot level around $1.5200 which has been a key near term ceiling over the past two weeks. So if these factors can be overcome then there could be more legs in this recovery. There is intraday support in the band $1.5060/$1.5120. The resistance of the primary downtrend on the daily chart comes in at $1.5360.
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