Cable has followed Friday's action and has made a substantial move higher. Asia is holding above the Daily Pivot of 1.5845 and has propelled this to 1.5960. Now we have resistance at 1.5980 but the bigger picture from the weekly charts indicate we can make the 38.2% long term Fib level - taken from the weekly charts which is at 1.6042. So we are going to take profit just prior to our 1.6030/40 resistance.
Because this is such a major level on the weekly charts there is scope for the market to hold this resistance and push lower. Daily and 60 min charts are overbought as is the 240 min ones so it is going to be really difficult to break beyond this 1.6040 resistance without first correcting.
A move back toward 1.5845 would go some way in easing the overbought scenario but again because of this major resistance in the 1.6040 area we would like to see further corrective pressure.
If we trade below 1.5820 further correction will apply and we will see 1.5775 to 1.5745 as a viable target over the next few sessions. We would introduce longs on such a move, keeping stops below 1.5720.
Because this is such a major level on the weekly charts there is scope for the market to hold this resistance and push lower. Daily and 60 min charts are overbought as is the 240 min ones so it is going to be really difficult to break beyond this 1.6040 resistance without first correcting.
A move back toward 1.5845 would go some way in easing the overbought scenario but again because of this major resistance in the 1.6040 area we would like to see further corrective pressure.
If we trade below 1.5820 further correction will apply and we will see 1.5775 to 1.5745 as a viable target over the next few sessions. We would introduce longs on such a move, keeping stops below 1.5720.