One to go one the radar - Cable approaching MAJOR support
One to go one the radar - Cable approaching MAJOR support just ahead of Fed meeting.
So, the GBP/USD weekly chart is catching my eye just ahead of the Fed meeting. It is starting to break down from the 55-week ma at 1.3635 for starters – why is this important? Because I have noticed that over time that markets tend to mean revert to their long term moving averages (55 and 200 week, but also 55 and 200 month), so should we start to break below the 55-week ma with gusto this would imply a move longer term to the 200-week ma currently at 1.3160.
Let us be a bit more precise should the market close below 1.3571 (this year’s low), this would be regarded as negative as we would no longer meet the criteria of a bull trend (definition of a bull trend is for higher reaction highs and higher reaction lows). In fact, one could argue it is a top pattern (these occur at the end of Bull trends and denote a reversal of trend). Not sure exactly what I would label it - probably as some sort of potential head and shoulders, I suspect - - what ever you decide to call it, a close below 1.3571 would be NEGATIVE.
I am sometimes asked why I use a 55-period moving average. 55 is not only a Fibonacci number (I am slightly obsessed with Fibonacci), but is also an approximation of a year, the 200-week is approx. 4 years… every 4-years is the election cycle in the USA for example. I have also found even people who do not watch charts will pay close attention to things like a 200-week ma, when they break the world sits up and pays attention.
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The information posted on Trading View is for informative purposes and is not intended to constitute advice in any form, including but not limited to investment, accounting, tax, legal or regulatory advice. The information therefore has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient. Opinions expressed are our current opinions as of the date appearing on Trading View only. All illustrations, forecasts or hypothetical data are for illustrative purposes only. The Society of Technical Analysts Ltd does not make representation that the information provided is appropriate for use in all jurisdictions or by all Investors or other potential Investors. Parties are therefore responsible for compliance with applicable local laws and regulations. The Society of Technical Analysts will not be held liable for any loss or damage resulting directly or indirectly from the use of any information on this site.
So, the GBP/USD weekly chart is catching my eye just ahead of the Fed meeting. It is starting to break down from the 55-week ma at 1.3635 for starters – why is this important? Because I have noticed that over time that markets tend to mean revert to their long term moving averages (55 and 200 week, but also 55 and 200 month), so should we start to break below the 55-week ma with gusto this would imply a move longer term to the 200-week ma currently at 1.3160.
Let us be a bit more precise should the market close below 1.3571 (this year’s low), this would be regarded as negative as we would no longer meet the criteria of a bull trend (definition of a bull trend is for higher reaction highs and higher reaction lows). In fact, one could argue it is a top pattern (these occur at the end of Bull trends and denote a reversal of trend). Not sure exactly what I would label it - probably as some sort of potential head and shoulders, I suspect - - what ever you decide to call it, a close below 1.3571 would be NEGATIVE.
I am sometimes asked why I use a 55-period moving average. 55 is not only a Fibonacci number (I am slightly obsessed with Fibonacci), but is also an approximation of a year, the 200-week is approx. 4 years… every 4-years is the election cycle in the USA for example. I have also found even people who do not watch charts will pay close attention to things like a 200-week ma, when they break the world sits up and pays attention.
Disclaimer:
The information posted on Trading View is for informative purposes and is not intended to constitute advice in any form, including but not limited to investment, accounting, tax, legal or regulatory advice. The information therefore has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient. Opinions expressed are our current opinions as of the date appearing on Trading View only. All illustrations, forecasts or hypothetical data are for illustrative purposes only. The Society of Technical Analysts Ltd does not make representation that the information provided is appropriate for use in all jurisdictions or by all Investors or other potential Investors. Parties are therefore responsible for compliance with applicable local laws and regulations. The Society of Technical Analysts will not be held liable for any loss or damage resulting directly or indirectly from the use of any information on this site.
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