Wednesday, August 12, 2009
Cable About to Correct Recent Drop?
| by: Mihai Marinescu Since the NFP on Friday cable has been losing ground with every trading session & my waves indicate we are most likely in a larger corrective move targeting the key 1.59 area in the next week(s). The momentum of the drop is definitely impulsive so I’m looking to sell the pair as soon as it manages to complete a retracement. It’s exactly this retracement i’m interested in for the time being, since the H4 chart is giving more & more signals of an upcoming correction in short-term.
On the large charts we seem trapped between the key previous res. @1.6618 & the immediate H4 supp. TL broken @1.6545 on the upper side and the key D1 TL & horizontal supp. @1.6300. On D1 chart this area is a “no man’s land”, which means bullishness in mid-term is already under attack. An indecisive doji right @ the 60MA on D1 further increases the sentiment of balance, which in my opinion favors a short-term retracement up. Whatever the outcome of the current short scenario, the bears need to confirm their commitment by defending the 61% fib of the current drop to confirm a continuation of the rally down to the 1.60-1.59 area.
On this background, the H4 chart has turned neutral yesterday & now bullish signs are starting to emerge on the indicators (Trix & RoC are now signalling correction). Since the momentum clearly slowed down since yesterday’s London session I see 2 probable scenarios for today: - a descent to 1.6420 – 1.6380 sometime in the next 2 hours (currently GU is trading @1.6480) which may turn out to be a spike – that’s my signal to buy cable aggressively & continue to add as the trade progresses towards a final target of 1.66. OR: - a slow move above 1.6520 before London open, followed by moderate bullish momentum up to approx. 1.6570-1.66 -> this will further emphasize that the current bear move is no mere pullback & we’re set to see prices below 1.62 by the end of the week. H1 is currently flat with M15 mixed, both giving moderate bullish signals ONLY above 1.6520. As a result I am flat for now & looking to enter longs on either of the 2 scenarios mentioned above. Labels: Forex Analysis, Forex Indicator, forex signal, Forex Trend, Market Analysis, Market Trend, money trading |
