Cable came sharply lower yesterday, and below 1.4950 saw 1.4893 and then bounced. Medium term charts are in a dire mess with the oversold conditions, and if the market is going to correct, Reversal Thursday is usually the day that this happens.
Already we are seeing a bounce back but we need to hold above 1.4950 to see continued upside moves. I am not saying that we are going to go screaming up and wipe out the week;s decline, but we can correct and look for the 1.5030/50 resistance to entice. This is from the 4-hourly fib level. Here we may well see profit-taking and sellers coming back into the market.
If we do break 1.5050, and to be fair there is a good chance that we can, we can we look for 1.5115 to 1.5145 as a short term viable target. Above 1.5145 and the medium term 1.5224 resistance looks to entice. There is nothing currently to suggest the downtrend is over, so we are still using rallies as correction. If we lose 1.4880 we have excellent levels at 1.4850/30 as a targeted area.
