GBP/USD: Cable 'Finely Balanced'
Forex4you | May 25, 2015 07:51AM ET
The outlook for cable is finely balanced: on the one hand it has broken down out of its rising channel and looks set to move lower; having still not full-filled its 61.8% downside target at 1.5170.
And yet on the other hand, the short-term up-trend looks like it might continue higher, since it has broken above long-term support & resistance, and then pulled-back into the same line where it is currently trading at 1.5445.
It is possible the courting of this long-term resistance-turned-support line following the initial break could precede the next leg higher. Such a move would require confirmation from a break above the highs at 1.5813 and a target at the major psychological level of 1.6000.
Alternatively a break below the level including a margin of confirmation – so below 1.5362 - could see the pair run down to 1.5170.
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