GBP/USD: Cable turning into a consolidation range [Video]

Richard Perry Independent Analyst

GBP/USD

There has been a mix of signals on Cable in recent sessions which have clouded the near term outlook. The huge rally from the mid-March low of $1.1405 found resistance at $1.2485 and has since been broadly drifting lower with a negative bias. However, yesterday’s bullish outside day was a good fightback from the bulls. This move needs to be followed by another positive session today otherwise the impetus of the move will be lost. Coming into the European session, a small range, doji candle suggests a lack of conviction. Looking at the hourly chart there is an argument now for Cable having formed a bigger trading range. Yesterday’s low at $1.2160 forming the support of a range of 325 pips, effectively with $1.2300/$1.2350 acting as a neutral, or perhaps pivot area to work from. Either side of this given either a positive (above $1.2350) or negative (below $1.2300) bias. But essentially, the hourly momentum configuration moderating suggests Cable turning into a consolidation range. With hourly moving averages all flattening within 40 pips around the neutral area, this is a settling market in need of a catalyst now. Accordingly we are near term neutral now. We turn bullish above $1.2485, or bearish below $1.2160.

Author

Richard Perry

Independent Analyst

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