Cable has been nicely bullish lately & the top @1.7000 should not be a major one. I personally don’t believe in major resistances @ round numbers, which is why my bigger picture is definitely bull. However I can’t help observing signs of trouble that may disturb the bulls’ joyride today, at least for a short while. Just the plain facts, as always:
First, my H4 indicators are turning back down indicating correction is near or already under way. RoC is already in bear mode while Trix is about to give a bearish crossover with its moving average (first signal of correction/reversal). Im not thinking of a big drop, just a brief touch-and-go in the 1.6820-1.6790 area (with potential continuation if the bears really have something important to say).
H1 is heavily divergent (RoC & stoch) while M30 chart is giving me a potential MA bearish setup about to be confirmed. This short-term picture is giving the bears some temporary fuel to diminish the bull pressure -> but they need to start right away, as a move back towards 1.7000 might see violent burst Â all the way to 1.72.
Finally, while the M15 chart remains a clear bull so far, M5 gives a possible low-risk short opportunity I will try to take later in London session, if confirmed. I’m waiting for the bullish response to the current 1.7000 – 1.6924 move down, which should push the MAs to cross over again to the upside (16950-1.6970). Once this happens, an opposite M5 crossover (bear) would be my signal to short with tight stop (not more than 30 pips on the current setup), target in the lower 1.68 area. If instead Â there’s a swing failure right @ the 60MA on M5 (1.6945) Â this could work just as well. However, any failure of the M5 MAs to cross back down would keep me away from shorts & even signal that I should join another round of bullishness (also a low-risk trade if taken early, target 1.7145 – 1.72).
Whether short or long let’s try to keep our risk low & stay open for whatever London session will bring