Richard Perry
Independent Analyst
GBP/USD
Although there is still a positive bias to Cable, the fact that the resistance of the falling 7 month downtrend continues to hamper the move higher is an increasing concern. The big trend line falls today around $1.2675 which is all but at the resistance of last week’s rebound high of $1.2670. Bouncing from $1.2480 was important to sustain any semblance of a positive skew to the medium term trading range, however, pulling back to that same neckline to leave further resistance at yesterday’s high of $1.2650 threatens to see that positive bias fizzle out again. The positive momentum configuration of early July is just beginning to lose its way now, as RSI tails back towards 50 and MACD lines flatten. A close back under $1.2540 would suggest the bulls are losing their control and would turn the outlook neutral once more. Below $1.2435 would turn into a more negative bias within the range. Given the frequent failures just under the seven month downtrend in the past week, the bulls need to break decisively above $1.2670 to really stamp their control.
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