Can Cable Bulls Test 1.6346/88?
Munther Marji | Sep 18, 2014 07:13AM ET
The pound dropped after testing 1.6346, which was expected, and helped us make some profit of the sell signal. However, in spite of reaching a 1.6245 after the FED, the pound recovered to 1.6321 this morning. If this recovery from the “post-FED” low continues, it will be expected to retest 1.6346, and this time it might be able to test another, even more important level at 1.6388. This level is probably the most important resistance for today because it combines the falling trend line from July’s 6-year high, with the short term Marji 57.1% retracement. But in spite of the importance of this level, its break needs a confirmation in the form of breaking above 1.6416. The first target for this break is yet another important resistance level at 1.6473, and if the bulls manage to push past this level, reaching 1.6620 will not be a surprise!
On the support side, the rising trend line from September 10th bottom meets the micro term Fibonacci 38.2% retracement at 1.6239. This will be our first support for today. Only with a break below this level that the bullish scenario of testing 1.6388 will become unlikely. In this case, a drop towards 1.6302 should be expected, ahead of 1.6167 & the important 1.6138. this last level is the key to reaching new lows for this trend (below 1.6050), and in this case tour favorite target is 1.6001.
Support:
• 1.6272: the rising trend line from yesterday’s low.
• 1.6239: an important support level which combines the rising trend line from September 10th 10-month low, with the micro term Fibonacci 38.2% retracement calculated for the rising move from the same low 1.6050 to yesterday’s high 1.6356.
• 1.6203: micro term Fibonacci 50% retracement calculated for the rising move from September 10th 10-month low 1.6050 to yesterday’s high 1.6356.
• 1.6167: micro term Fibonacci 61.8% retracement calculated for the rising move from September 10th 10-month low 1.6050 to yesterday’s high 1.6356.
• 1.6138: micro term Fibonacci 71.4% retracement calculated for the rising move from September 10th 10-month low 1.6050 to yesterday’s high 1.6356.
• 1.6090: September 7th daily low.
• 1.6050: September 10th 10-month low.
• 1.6001: long term Fibonacci 50% calculated for whole enormous move from 2013 yearly low 1.4812 to July’s 6-year high 1.7190.
• 1.5954: September 23rd 2013 daily low & short term bottom.
• 1.5902/21: a well-known support area which includes several daily lows from October & November 2013.
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Resistance:
• 1.6321: the current daily high at the time of preparing this report.
• 1.6346: short term Fibonacci 50% retracement level, calculated for the drop from September 1st daily high 1.6642 to September 10th 10-month low 1.6050. This level was tested with accuracy yesterday, when the price topped 10 pips above it.
• 1.6388: an important resistance level, which combines the falling trend line from July's 6-year high, with the short term Marji 57.1% retracement level, calculated for the drop from September 1st daily high 1.6642 to September 10th 10-month low 1.6050.
• 1.6416: short term Fibonacci 61.8% retracement level, calculated for the drop from September 1st daily high 1.6642 to September 10th 10-month low 1.6050.
• 1.6473: short term Marji 71.4% retracement level, calculated for the drop from September 1st daily high 1.6642 to September 10th 10-month low 1.6050.
• 1.6485: medium term Fibonacci 38.2% retracement level, calculated for the whole move from July’s 6-year high 1.7190 to September 10th 10-month low 1.6050.
• 1.6620: medium term Fibonacci 50% retracement level, calculated for the whole move from July’s 6-year high 1.7190 to September 10th 10-month low 1.6050.
Trend:
• Short term: Down, as long as we are below 1.6388.
• Medium term: Down, as long as we are below 1.6473.
• Long term: Up, as long as we are above 1.5492.
Article originally appeared on MarjiFX.com
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