Richard Perry
Independent Analyst
Sterling was able to muster a second straight positive day yesterday. Despite this though there is still an expectation that the sellers will resume control at some stage soon and Cable will be dragged lower once more. The momentum indicators have marginally improved but are still in medium term bearish configuration. The rebound would certainly need to break above the initial resistance at $1.6126 to improve the near term outlook, but with the barrier of the 12 week downtrend and the key near term resistance both coming in around $1.6226 the upside may be limited. Although Cable has been volatile in recent sessions, I still expect a retest of the 1.5873 low in due course. The early European session has seen the pressure back to the downside and a break back below the near term pivot level at $1.6020 would be negative once more. The initial support is then at yesterday’s low of $1.5940.
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