GBP/USD: Dollar recovery turned Cable around after a five day bull run [Video]
|GBP/USD
A dollar recovery has once more turned Cable around after a five day bull run. It is incredible to see that even amidst the volatility that has so enormously ramped up recently, there is still a tendency for Cable to trend for a handful of days in one direction and then retrace once more. The strong negative candlestick which has closed the market back below $1.3000 once more, renewed the negative bias and re-opens the pressure on the 50% Fibonacci retracement (of $1.2193/$1.3515) at $1.2855. On so many occasions has Cable used these Fib levels, that closing decisively below the 38.2% Fib (at $1.3010) is a key move. Momentum indicators turning lower with the RSI falling back under 50 (from a failure at 60) along with a Stochastics bear cross has given the chart a negative bias. The Cable bulls dragged the market higher overnight, but in no meaningful manner even before the Bank of England rate cut renewed negative pressure on Cable. So, with the negative legacy of yesterday’s session still a hangover, we look for any intraday or near term rallies towards $1.3000 to fade for pressure back towards $1.2855. A closing breach of the 50% Fib level (at $1.2855) would re-open $1.2725 again.
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