Cable: Day traders selling into recent rally, see why?

GBPUSD H4

GU4

Cable has been trading sideways throughout the Asian and early European session after finding support on the 50 Fib (White) (see below) after the sell off overnight. The sell off came with a number of stops being triggered on the break of the 1:1 (Light blue), 23.6 and 38.2 Fib level (see below) on worse than expected data for the UK as well as better than expected US data.

The level to keep a close eye on now is the 1:1 (White) at 1.53900 if the market happens to test this level in the near future and it fails to attract solid buying interest from the bulls a deeper correction is likely to take place.

GBPUSD M30

GU30

With the break of the 1:1 (Light blue) intraday players have seen this as an opportunity to sell with the 1:1 (Yellow) at 1.55600 attracting some decent selling in early European trade. If a break of the 50 Fib (White) which is also US low is seen I would expect selling pressure to pick up on the downside.

* A 1:1 refers to a current correction being equal in length to a prior correction

Reece Marini is an FX trader and Director of the http://forexhft.com an instant Forex rebate and Signal provider, if you would like to subscribe to our daily reports you can do so here its FREE

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