Quick update on Cable...

FX:GBPUSD   British Pound / U.S. Dollar
315 0 6
For those who read our previous report (http://blog.icmarkets.com/monday-19th-october-weekly-technical-outlook-and-review/), you may recall that our team went short at 1.5506. 50% of our position was locked in at 1.5434 and the stop placed at breakeven. As you can see, price has yet to hit our breakeven stop, so we’re still in game. For how long though is anybody’s guess.

As of now, Cable has entered into a phase of consolidation between 1.5492/1.5430 and is currently trading mid-range. A push above this range sees immediate resistance from 1.5500, followed closely by supply at 1.5528-1.5510, which, as you can see, boasts an AB=CD correction point within. Conversely, a push below this range would likely open the doors for further downside towards psychological support 1.5400.

Given the above, where do we see this market headed today/this week? Well, considering weekly action is loitering within supply at 1.5658-1.5425, and the daily chart shows price nibbling at the underside of a swap resistance level at 1.5484, we still favor a sell-off in this market. That being the case, this is what we have logged so far:

• Price could just as well continue to sell-off from current prices and break below the range and hit 1.5400. This would not provide a selling opportunity but would be great for our live short trade as 1.5400 is our next take-profit area.

• A rally may be seen and price could very well fakeout above the range, and hit 1.5500 and sell-off. This could provide traders a level to sell into this market from (confirmation required).

• Finally, we left the best till last. A fake above both the consolidation and 1.5500 into supply at 1.5528-1.5510 would be great, since a ton of buy stops would be collected and could be used as liquidity to sell into. Of course this would take us out of current position at breakeven, but, in turn, it would open up the possibility to another short.

Levels to watch/ live orders:

• Buys: Flat (Stop loss: N/A).
• Sells: 1.5506 (Stop loss: Breakeven) 1.5500 Tentative – confirmation required (Stop loss: dependent on where one confirms this level) 1.5528-1.5510 Tentative – confirmation required (Stop loss: dependent on where one confirms this area).
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