Richard Perry
Independent Analyst
It would seem as though the dollar pressure is now a greater force than the any positivity for sterling. The sharp bearish reversal on Friday has again flipped the outlook to more corrective once more and the pressure is dragging Cable lower again. The overnight breach of the key reaction low at $1.5445 looks to be confirming that the dollar bulls are becoming the dominant force. The uptrend in place since the mid-April low has now been broken and a close below $1.5445 today would now confirm that a new sequence of lower highs is being formed (at Thursday’s $1.5700). Momentum indicators on the daily chart are also now all looking corrective, with the MACD lines having crossed, whilst the Stochastics and RSI are also in consistent decline. Watch for a test of the reaction low at $1.5390 which was the 11th May low and then the support at $1.5353. The intraday hourly chart shows all moving averages in bearish decline now, whilst the old support around $1.5500 is now being used as resistance. Any rally now into the band $1.5500/$1.5550 looks to be a selling opportunity.
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