Richard Perry
Independent Analyst
Despite more of a choppy day yesterday (after the Bank of England meeting minutes especially), Cable continues to drift lower. The corrective phase has also now seen a close below $1.7060 for the first time in over 3 weeks. Whilst this is not explicitly a negative development, the rate is now firmly into a test of the 60 pip support band above $1.7000. Furthermore the correction has been almost uniformly steady over the past 7 days now. The longer term outlook remains very strong and this still looks to merely be a correction within the primary uptrend, but how far could it go. I am still expecting support to form above $1.7000 but over the course of the past few months, the last 3 big corrections have all formed support on the rising 89 day moving average (currently $16873). The likely course of events will be that a consolidation or support will take hold in the price whilst the moving average catches up and then the rally continues. However for now the drift lower is on. The next support below $1.7000 is at $1.6950. The bulls would regain the initiative above $1.7100.
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