Cable had a solid session in heading up from a 1.5030 low, to reach 1.5130 where it is closing in NY, assisted by a decent move in the cross with EurGbp heading to a new trend low of 0.7172 as the ECB commenced its QE programme. Given that the next move from the BOE appears to be a hike, later in the year, the cross really looks as though it can only head in one direction, but time will tell. Further losses towards the long term descending channel support at around 0.7090, with not a lot in between to support it, would not surprise.As for Cable, the shorter term indicators do point to the chance of a further recovery to the Fibo resistance at 1.5152 (23.6% of 1.5551/1.5030). Beyond here would see sellers as we approach 1.5200, above which, the 100 HMA/descending trend resistance at 1.5215 and the Fibo level at 1.5225 (38.2% of 1.5551/1.5030) will act as resistance. Friday’s high was at 1.5254 and I guess that we could at some stage want to revisit this area, although it seems rather doubtful today given the lack of data from the UK/EU/US.If Cable turns lower, then the initial bids sill arrive at 1.5100, below which, minor support is seen at 1.5075 ahead of today’s session low at 1.5030. Below here would test the strong 1.5000 level, a break of which would send it to the minor double bottom (31 Jan/3 Feb) at 1.4987 and then to the previous trend low of 1.4951 (23 Jan). A break of this would then head to the import Fibo support at 1.4918 (61.8% of 1.3502/1.7191) which should hold it for a while, but below which would want to take a look at the July 2013 low at 1.4813. The base of the channel is at 1.4600 and given the look of the daily indicators it seems to be a realistic target.
Look for a steadier day today, but with Cable again underpinned through the cross. 1.5080/1.5180 would not surprise.
Meta Trader – AxiTrader GBP/USD: 4 Hour
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