Richard Perry
Independent Analyst
The bull run continues higher with a seventh completed bullish candle in a row. This was another strong day which has taken Cable ever closer to the key resistance at $1.5550. This is the level that needs to be broken for the bulls to be considered in control and to seriously suggest that the bear trend is at an end. The momentum indicators have been on a tear and the RSI is now up at 70. This therefore is a big test and will be an indication of what market Cable is now in. If this is a bear market rally traders will see the RSI at 70 and consider it an ideal profit-taking opportunity. However if it is a more sustainable bull run then they will be comfortable with it up at these levels. Already in the wake of the FOMC, Cable is around 90 pips off its high and the Stochastics have crossed over. The intraday chart shows a move below $1.5390 (post FOMC spike low) is an initial support while $1.5345 is also a key level as the near term momentum indicators move correct. Furthermore, the rising 55 hour moving average is also at $1.5345 which has also been a good basis of support. Failure of these levels could usher in some profit-taking. Above $1.5500 directly opens a test of $1.5550.
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