Who’s in for Cable’s quick pullback setup today?
We’ve seen trend line breakouts and a chance to catch a possible reversal!
A buyer may be waiting here.
Cable looks poised for a reversal from the short-term downtrend as it has broken out of the downtrend line.
However, as the price is in the midst of a correction, we may see more pound bulls trying to jump into those bargain levels marked by the Fib retracement tool.
So far, the 50% level already seems to be holding as a bottom as it coincides with the 200 SMA dynamic inflection point which adds strength as support.
After all, the 100 SMA is above the 200 SMA, confirming that the uptrend is more likely to resume than reverse. However, the Stochastic is already close to overbought territory, suggesting a return to bearish sentiment.
In that case, a larger correction to the 61.8% FIB near the previous trendline resistance is likely. If Fib levels are sufficient to contain losses, GBP/USD may turn its sights back on higher swings around 1.2200 and beyond.
Worried about missing the whole move? Besides the current market price, scaling in more conservative entries could also be an option!
Remember, most of the US economic data released this week were weaker than expected. This could dampen hopes for a more aggressive Fed tightening and weigh on the dollar.
In addition, concerns about the U.S. banking sector have led financial analysts to significantly lower their forecasts of rate hikes.
Conversely, the UK economy shows some green shoots when it comes to business surveys and employment data. Do you think these are enough to sustain the pound?
This content is strictly for informational purposes only and does not constitute investment advice. Trading in the financial markets involves risk. Please read the Risk Disclosure to understand the associated risks.