The Cable has been trading within a descending channel for over three weeks but looks to be trying to head towards the upper trend line of this channel. This move has been helped by US$ weakness and positive GBP Construction PMI data and is bringing the 1.55 level back into focus. There is still GBP Services PMI data to come tonight and the BoE Interest Rate announcement tomorrow but any welcome news on these fronts could see this 1.55 level tested again.
Cable 4hr: this trading channel is still containing price but the upper trend line is near the key 1.55 level:
Cable 4hr Cloud: it is worth noting that the 1.55 level is also near the top of the 4hr Cloud. Thus, a break and hold above the 1.55 level and 4hr Cloud would be a bullish advance. Note that price is already above the daily Cloud:
Cable daily: this Bull Flag was getting a bit too long in the Flag part but it is still a technical pattern worth keeping in mind:
Summary: watch for any break and close above the 1.55 level on the Cable. This would constitute a break of a recent trading channel, a break of a key S/R level and a break of the 4hr Cloud and, as a result, be a fairly bullish signal.
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