Richard Perry
Independent Analyst
GBP/USD
We have recently been concerned by the lack of real traction on Cable, given the underperformance of the dollar across the major pairs. However, Cable took a big leap forward in recovery yesterday as it posted a strong bull candlestick to close above resistance a t$1.2465. The momentum of this recovery within what is a trading range between $1.2075/$1.2645 is now such that the bulls will be eyeing the range highs once more. Impressively, momentum is with the traction of the move, as RSI is now this morning above 60 and is its highest since early March. It suggests that pressure towards $1.2645 is building. However, we would still view this run with caution and given the price moves on Cable since late March, this is a move that could be close to maturity. All of these swings higher and lower over the past nine weeks have been one to two weeks in duration, before a retracement has set in. This move is currently two weeks old. The mid-range breakouts $1.2360/$1.2465 are now a gauge for support.
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