Cable Continues To Consolidate In Narrow Range
Anna Coulling | Jul 26, 2016 06:02AM ET
Cable continued to consolidate last week in the after shock of Brexit, with the pair trading in a narrow range on the daily chart.
This continued at the start of this week as trading kept to a 70 pip range, and closed 9 pips lower off the open.
The ceiling of resistance for the pair is now firmly in place at 1.3480, with the floor of support at 1.3065 now being tested. Both of these levels are clearly defined with the accumulation and distribution indicator, with the red dotted line marking the ceiling, and the blue dotted line the floor.
Last Thursday’s weak attempt to rally on narrow spread price action and rising volume, was duly confirmed with Friday’s reversal and closing the week at 1.3109. Adding further downwards pressure are the high volume nodes on the volume point of control indicator between 1.3200 and 1.3300.
Given Friday’s weak services data (and despite better than expected manufacturing news), markets will be factoring in a interest rate cut in August which is likely to add further downwards pressure on the British pound in due course.
In the meantime, these levels now represent the extent of the technical channel now developing, and for any sustained trend to build, both are now key to the longer term direction for cable.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.