Richard Perry
Independent Analyst
Cable still has an element of a consolidation drift to it. There is no really strong desire for selling pressure to pull the rate lower, and for now the bulls appear happy to sit back and wait. This continues to allow the technical indicators to unwind without any real damage being done to the longer term outlook. The fact that the RSI is now back into the mid-50s may start to look interesting again from a long perspective, however there is still room for further unwinding still. Friday saw another poke below the $1.7060 support which was quickly seen as a chance to buy again. I think that Cable in the $1.7000/$1.7060 will continue to be seen as a chance to buy. The current outlook would suggest the bulls would only really have cause for disappointment on a breach of $1.6950, but even then the 89 day ma is the longer term basis of support at $1.6855. I still expect this consolidation to be resolved with a breakout above $1.7191 to further multi-year highs.
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