Cable rally hits the buffers but sellers should be cautious.

The Technical Trader’s view:

MONTHLY CHART

We can see that there’s a long-term trading range well-established from the early 1990s.

And the market’s recent rally has driven it up to substantial resistance at the 1.050 low.

WEEK CHART

The struggle at that level is clear – a band of resistance looks to be in place 1.6802-1.7050.

(Equally we note that there was a double bounce from the lows adding great vigor to the rally.)

DAILY CHART

But this reveals that the market has just tip-toed up to the resistance band and pulled back.

Certainly the prior High Supports nearby at 1.6661 have been smashed – yet we are not that bearish because there is no clear REVERSAL structure in place – short-term.

So for the moment we are standing back awaiting short-term patterns that endorse the medium-term failure at the 1.7050-1.7450 band of resistance.

Mark Sturdy,
John Lewis
Seven Days Ahead

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