It was a case of buy the rumour sell the fact last week, and up we went on Wednesday and Thursday finally getting the market back to where it should have been Friday. As we said, support was lower at 1.6485, and we have seen profit taking between 1.6510 and 1.6485 and this has held the downside. Now although we are just above 1.6510 we need to really make a break above 1.6535 to keep any pressure at all on the topside.
We have the Key Day reversal evident on the Cable, and this combined with turning stochastics does suggest that we are entering a sell rallies phase. Now even if 1.6535 does break we are looking limited on the topside to 1.6585/1.6605 and we woud again look to be sellers on strength to here. We would hold shorts, adding to 1.6660 and only reversing above 1.6695. We know the support is down to 1.6485/75 and initially cover to here.
Now if there is no correction and we lose 1.6470 support we are looking at the market trading lower and 1.6400 will once more entice us lower. Cover shorts to here. Only re-sell if we lose 1.6380 as if a loss is posted below here we look for further weakness down to 1.6350 then 1.6320.
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