Richard Perry
Independent Analyst
GBP/USD
It is an important moment for the Cable bulls. We have discussed recently the importance of the approaching seven month downtrend (which comes in today at $1.2695). Yesterday’s failure at $1.2670 (also a shade under an old mid-June lower high of $1.2685) will leave Cable bulls concerned that this is another failed rally. The move looks to at least be perpetuating the medium term trading range. There is support of an eight day uptrend being tested this morning at $1.2580. A closing breach would disappoint the bulls, but the more important reaction would be around the neckline of what is a near term base pattern a t$1.2540. Given how Cable is still in a medium term range (between $1.2075/$1.2810), closing under $1.2540 would at least neutralise the outlook within the range. Under $1.2435 would then turn the market bearish within the range. Momentum is beginning to react too, with Stochastics now threatening a “bear cross” which would be just the third in three months and the previous two have all been the precursor to a decisive swing lower once more within the range.
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