ICmarkets
Long

Interesting P.A on Cable...

FX:GBPUSD   British Pound/U.S. Dollar
220 0 3
Further selling was seen on Cable yesterday, resulting in price taking out several 4hr technical levels during its onslaught. There was little fight seen at the Quasimodo area 1.5328-1.5351, while 1.5300, however, managed to hold this market steady for a while, but did eventually gave way consequently reaching lows of 1.5220 on the day.

As can be seen from the 4hr chart at present, price is kissing the underside of 1.5250, which so far seems to be holding firm. Should the sellers manage to hold this market below here today, a push lower to connect with 1.5200 could be on the cards. Granted one could look to sell into this move, but quite frankly we would have little interest in joining the current hoard of selling going on at the moment. Our rationale behind this approach simply comes from scanning across to the higher timeframes. Check out how both the weekly and daily charts show price now sitting within demand (1.5169-1.5260/1.5162-1.5254). The daily demand even converges with a descending channel support taken from the low 1.5329. Therefore, from a technical perspective this is not really the ideal place to begin looking to sell in our opinion.

Ultimately, we’d only look to trade this pair long IF price reached the 4hr demand zone lurking below at 1.5162-1.5187. Yes, we run the risk of missing a bull move from current price, but by entering long now, we also run the risk of serious drawdown. The 1.5300 handle sitting just above our chosen buy zone will likely be faked lower should price reach this number today, so guys do watch your stops here. In fact, this 4hr demand area looks so attractive considering its higher timeframe confluence that we have decided to place a pending buy order just above it at 1.5188, and stop set below the zone at 1.5157.

Levels to watch/ live orders:

• Buys: 1.5188 (Stop loss: 1.5157).
• Sells: Flat (Stop loss: N/A).

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