Cable Bulls Exhausted Upon Hanging Mans & Shooting Star
Cable prices (GBPUSD) rallies have taken a halt upon hanging man and shooting star patterns at peaks.
Hanging man patterns have occurred at 1.2415 and 1.2408 levels, shooting star pops up at 1.2392 level in the low liquid environment, with historically strong indicators not working at this juncture.
The prevailing price action continues to lurch lower, consolidate sideways for a while and then drop again. (The average true range over the last week has moved to around 278 pips, from around 100 around the beginning of March).
A recovery back through 1.1950-1.2050 would be a first indication of real stability. Otherwise, intra-day resistance lies in the 1.24 – 1.2475 region ahead of there.
Overall, bulls in the minor trend have halted upon above-stated bearish candle formations, while the current price attempts to nudge below DMAs, both leading & lagging oscillators are indecisive for now.
On a broader perspective, hanging man pops at 1.3202 levels to disrupt the last 3 and a half years’ consolidation phase, while bears break-down triangle support (refer monthly chart). The current price tumbles below 7, 21 & 100-EMAs, consequently, the major downtrend resumes and hits multi-years’ lows (1.14) as both leading and lagging oscillators are bearish bias on this timeframe.
Next projected downside levels are 1.1110-1.1080, the psychological 1.10 region, then 1.0840-1.0800 with 1.0625/1.0590 below there. Bloomberg shows the 1985 low as 1.0520, but we reckon it traded down to 1.0045.
Trading tips:
At spot reference: 1.2374 level, contemplating above technical rationale, tunnel spreads are advocated on trading grounds with upper strikes at 1.24 level and lower strikes at 1.2240 levels.
Alternatively, activate shorts in GBPUSD futures contracts of April’20 deliveries with an objective of arresting potential slumps amid pandemic circumstance.
Hanging man patterns have occurred at 1.2415 and 1.2408 levels, shooting star pops up at 1.2392 level in the low liquid environment, with historically strong indicators not working at this juncture.
The prevailing price action continues to lurch lower, consolidate sideways for a while and then drop again. (The average true range over the last week has moved to around 278 pips, from around 100 around the beginning of March).
A recovery back through 1.1950-1.2050 would be a first indication of real stability. Otherwise, intra-day resistance lies in the 1.24 – 1.2475 region ahead of there.
Overall, bulls in the minor trend have halted upon above-stated bearish candle formations, while the current price attempts to nudge below DMAs, both leading & lagging oscillators are indecisive for now.
On a broader perspective, hanging man pops at 1.3202 levels to disrupt the last 3 and a half years’ consolidation phase, while bears break-down triangle support (refer monthly chart). The current price tumbles below 7, 21 & 100-EMAs, consequently, the major downtrend resumes and hits multi-years’ lows (1.14) as both leading and lagging oscillators are bearish bias on this timeframe.
Next projected downside levels are 1.1110-1.1080, the psychological 1.10 region, then 1.0840-1.0800 with 1.0625/1.0590 below there. Bloomberg shows the 1985 low as 1.0520, but we reckon it traded down to 1.0045.
Trading tips:
At spot reference: 1.2374 level, contemplating above technical rationale, tunnel spreads are advocated on trading grounds with upper strikes at 1.24 level and lower strikes at 1.2240 levels.
Alternatively, activate shorts in GBPUSD futures contracts of April’20 deliveries with an objective of arresting potential slumps amid pandemic circumstance.