Cable: the weekly close will be key by Mary McNamara

I noted yesterday how the Cable was approaching a key S/R level being the 61.8% fib of the latest bull move (2013-2014). Price has now broken below that support and any weekly close below this level might suggest much lower targets.

GBP/USD weekly: the weekly candle has yet to close BUT any weekly close below the 61.8% fib would suggest it might target the 78.6% fib down near 1.53:

GUweekly

GBP/USD daily: we have had a daily close below the 61.8% fib. The 61.8% fib is a key Fibonacci level and often notes a demarcation point for trend change:

GUdaily

GBP/USD 4hr: price doesn’t look to be stalling at all just yet:

GU4

GBP/USD monthly: a weekly close below the 61.8% fib would suggest a trip to the 78.6% fib level as stated above BUT the main point to note is that this fib is also near the monthly triangle support trend line and, as such, may act as a bit of a magnet for price action:

GUmonthly

 

USDX 4hr: we have seen a bit of USD strength during today’s Asian session and this has no doubt been putting pressure on the Cable. The index had been consolidating in a triangle pattern but looks to be trying for a bullish breakout. There isn’t any GBP data tonight but there is USD Retail Sales and Consumer Sentiment data. Any bullish continuation with the USD would be bearish for the GBP/USD:

USDX4

 

Summary:

  • watch for any weekly Cable close below the 61.8% fib as this would suggest bearish continuation, possibly to the 78.6% fib near 1.53.
  • watch the USDX as any bullish breakout on the index would be bearish for the GBP/USD. Conversely, any USD weakness would help to support the GBP/USD.
  • Dean Malone has posted another GBP/UDSD update today as well.

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