ICmarkets

Why we're remaining flat on Cable – anyone seeing different?

FX:GBPUSD   British Pound / U.S. Dollar
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Fears of a ‘Brexit’ have been clearly weighing down on this pair, as cable recently dived below the 1.42 handle and plugged into a floor of bids around 1.41, which for now is seen holding firm. However, looking at the H4 candle action surrounding 1.41 its doubtful price will push higher from here in our opinion. The first visit (seen marked with a green arrow) was unable to close above the prior candle’s body. The second test proved there is still selling pressure from above as price closed within a few pips of 1.41. It is now down to the third touch which is in the process of printing at the moment, and looks to be somewhat bullish .

With the above points in mind, let’s take a peek at the bigger picture… Weekly demand at 1.4005-1.4219 has yet to register bullish intent, which is quite concerning. Along the same vein, daily demand at 1.4090-1.4195 is also on the brink of destruction, as price is currently testing the lower edges of this area as we write. If this zone does indeed give way, there is immediate support seen just below in the form of a daily Quasimodo support coming in at 1.4052. This is, in effect, the last barrier of support shielding this pair from dropping down to cross swords with 1.3878 – another daily Quasimodo support (seen located within a weekly support area at 1.3501-1.3804 – the next downside target beyond the current weekly demand zone )

Our suggestions: We would recommend holding fire trading this pair given the above notes. There is always another day, and trading when unsure is a sure fire way to lose money in the markets as we then become emotional!
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