Euro Sterling trying to break out

Euro Sterling trying to break out 

Euro Sterling has been very strong since breaking the weekly down trend back in January and has been in a period of consolidation at the highs for the past six weeks. On the verge of breaking out, a daily close above 0.7900 is key and more upside would be expected.There is likely to be overhead resistance at 0.8020-60 with multiple highs in this area back last Summer. If we do break this area extension projections above come in at 0.8115 and 0.8230. These are good targets for longs looking to cover rather than to put on fresh shorts initially. Only a false break above the 0.7900 level would take away the bullish bias for now. 

Cable weekly - is that an inverse? 

Cable has formed an inverse head and shoulders on the weekly chart and the test of the neckline marks the high for the week at current. A break and close above here would target the 1.5200 area over the coming weeks. Before we get too excited though there is along term down trend which would also need to break. Until this occurs I would still err on the side of caution with longs - nothing quite like buying the high of a big range just because it breaks the first trend line. In fact, so long as we remain below that neckline the case can be argued to press the shorts as the stop can be relatively tight. 

Euro Yen still on the rise 

The Euro Yen chart underlines just how strong the Euro has been as a currency over the past couple of weeks. So long as we remain above the 126 level then longs are the favoured play though we have resistance above at 128.50. Through here though and a test of the long term down trend is likely at just above 129. This may act as resistance on the first touch but due to the sheer amount of tests it has had since December I think the odds are that it will break sooner or later. The question is whether it can hold above once it does. if so then longs up to 131 or even 132.40 would be the trade, with a stop back below 128.50.