Technical Analysis - GBP

Tuesday, July 9, 2013, Marketing Communication GBPUSD Weekly The Weekly chart above details how cable is trading within the retracement area calculated from the 2009 moves. Early in 2013 cable broke down out of the tightening formation, red diagonal lines.  Following this break support was found off the 61.8% level, and the resultant tally has brought prices up to the 38.2% level. The longer term outlook on cable remains skewed to the downside, due to the trend break early in 2013. Moves above 1.5691, the 38.2% level, are needed to turn more optimistic. GBPUSD, Daily We suggested last week that trading over US Independence Day could be erratic, however we did feel that the near term trading range would offer support. We can see however that price action has broken down to the March lows over this period. The Stochastic has moved down to oversold areas, and appears to be turning, in conjunction with the 0% retracement level support we could see buyers interested at the current levels, using the 1.4832 area for stops. Suggesting a decent risk/reward outlook for trading buys at current levels, with moves under 1.4832 as stops, and potentially stop and reverse levels. GBPUSD, 4hr On the four hour chart we can see how the selling last week was significant to knock the price action down under the already bearish trading range, red region. So while the Daily chart may be offering some decent risk/reward opportunities for the long side, the short time frame traders may well need to see more substantial basing action on the hourly charts before coming on board. Without such solid basing action the market may yet use any near term recovery as an opportunity to sell into the bearish trend, as with the move on July 3rd. Technical Analysis is at its best when the hourly, daily, and ideally weekly charts all coincide into one overall trend. So this dichotomy between the hourly and daily chart is a slight concern, as a result the near term outlook is bearish, with the hourly trend likely to set the tone, ready to turn positive if the daily trend is able overpower the weakness on the hourly chart. CFD Sales/Traders 0044 (0) 207 894 8883 cfdsales@cantor.com Equity Spread Bet Sales 0044 (0) 207 894 8800 sales@cantorcapital.com Graphs Graph images are created on Bloomberg, and remain under copyright to Bloomberg. Depending on your email settings the images contained in this note may not be downloaded correctly on the first viewing. Select the view 'Web version' link on the header, which will open a browser window that will display the images correctly. 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