The Cable enjoyed a huge bounce today following FOMC but, as I write now, it is back below the key 1.50 level. This is the level to watch in coming sessions.
Cable 4hr: I had tweeted with FOMC that price might rally to test the 61.8% Fib and 4hr 200 EMA region and…… that it did! I scalped a nice 190 pips off this move. The 1.50 proved to be strong resistance though and price is back below this level during today’s Asian session however I see this as the critical level to watch in coming sessions:
Cable daily: price is back below this key 1.50 support and resistance level now though and a hold below this region would support a 2,000 pip Bear Flag pattern:
Cable weekly: the weekly chart shows this Bear Flag pattern more clearly and how any bearish follow through with this move could target the 2008 lows:
Cable 4hr Cloud: note how the bottom of the 4hr Cloud aligns with the 1.50 region. This adds extra resistance to this region:
Cable daily Cloud: any break and hold back above 1.50 would suggest price might tackle the daily Cloud on way to test the 1.50 region:
Cable monthly Cloud: the monthly close has a bit of time to go yet but it is worth noting that the Cable has not made a monthly close below 1.50 since back in mid 2010. Any monthly close back above 1.50 this month would have to be seen as a somewhat bullish signal:
Summary: the Cable, like may FX pairs, enjoyed quite a bounce with FOMC but the next major directional move isn’t quite clear just yet. Traders need to watch the 1.50 level to gauge the next wave of sentiment with trading this pair:
- a hold below 1.50 would support the 2,000 pip Bear Flag pattern.
- a move back above 1.50 could help to carve a base here for the Cable.