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Will Cable Hold Long-Term Trendline?

In a shorter view of a consolidating triangle and a longer-term view of the 3+ yr trendline support, the long term direction of Cable could be in the balance during the 1st quarter of 2012. Stay tuned.


The Cable chart below shows the break out of the triangle had led to a ~2 big figure rally, but a break back below trendline support could put Sterling under some pressure. The trendline 21hr is breaking below the 100hr from a short-term perspective as the pair sits right above the 50% retracement of the December move.

The GBPUSD falls below 100 hour MA

The GBPUSD has fallen below the 100 hour MA this morning and that has led to some selling pressure in the pair. The next target comes in a tthe 1.5618 level which is the 50% of the move up from the December 16th low. Below that level, the 1.5572 to 1.5581 area is the next stop.

In the UK today, they reported sluggish data.  Home loans for home purchases was weaker than expected  and the Index of Services fell by more than expected with a -0.7% decline vs a -0.1% expectations.

UK Nationwide Consumer Confidence

The November Nationwide Consumer Confidence expected at a very low 36, beat expectations at 40 despite concerns spreading throughout Europe (prior 38.) The Sterling gained a mild bid on the release as it approaches its support trendline for December. The triangle continues to shrink on the pair as it consolidates a bit ahead of year-end.

GBPUSD moves back toward the days midpoint after finding support against the 200 hour MA

The GBPUSD did bounce off of the 200 hour MA (green line in the chart above) for the second time and the bounce has also moved above the broken trendline (see chart above) at the 1.5631 level (see prior post).

GBPUSD remains in channel downtrend

The GBPUSD remains in a downward trend channel that has defined the lows and highs this week. On the lower channel, I have outlined two parellel trendlines.  Each has been used during the week to define risk for traders.  The higher trendline has support at the 1.5416 currently. The lower comes in at the 1.5390 level.  On the topside, the move higher tested the upper trendline today but was not able to push above it


EURUSD and GBPUSD hold below 100 bar MA on 5 minute charts

The 100 bar MA (blue line in the chart above) comes in at 1.3636 currently. The price has remained below this MA line and keeps the bias to the downside as a result. 

For the GBPUSD , the same dynamic has occurred. The 100 bar MA is at the 1.5914 currently and staying below it keeps the bears in charge for that pair as well. 

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