Mean reversion on the cards and possible run back to 8th Feb low

The GBP/USD symmetrical triangle (ST) on the hourly chats is due a breakout, one way or the other. On a continuation of the upside in cable - (trade war talk optimism that is denting the greenback and giving life to risk on FX is likely here to stay this week (with a probable extension to the deadline being agreed)) - the FTSE would likely suffer another blow in a critical techncial area. After breaching the 50% Fibo target at 7222, with the confluence of R1 and a key trend line resistance level that meets a horizontal support level made up of Sep 2018 lows, bullish attempts are capped. Offers meet RSI at 70. Daily stochastics are also well overbought, indicating the buyers will stop buying. To the downside, if the 7190/80 level support area doesn't hold, a mean reversion of 50% of the move from 8th Feb lows to 7164 guards a firmer 7060/70 area (made up of 38.2% Fibo of May 2018 highs to Dec 2018 lows and Feb/Mar 2018 and Feb 8th 2019 lows). However, on a breakout in cable to the downside of the ST, FTSE bulls can look towards that menacing resistance of the 200-D SMA at the round 7300 level, a moving average that was last tested and breached momentarily back in Sep 2018. A break of the 200-D SMA will look for the 61.8% Fibo target located at 7381. Orders placed both sides of the ST in cable OCO and a short in FTSE with SL above 200-D SMA.

Trade active:

Adding to the bearish outlook, the hourly descending triangle in the FTSE (a bearish pattern) has also been identified.

Comment:

First target of 8th Feb lows hit - played out like a dream. Stop trailed to a touch positive above 13th Feb highs.