Weekly Report 31/10 -04/ 11/ 2011
The pair has collapsed during the Asian session today as seen on the secondary image of the four-hour time scale. This decline suggests that 61.8% Fibonacci retracement of CD leg for the bullish harmonic AB=CD pattern -the second technical target of the pattern- could be solid enough to prevent the pair from reaching the extended technical targets starting at 76.4% Fibonacci level. At the same time, RSI 14 which is frequently obeyed by Cable started to show signs of weakness. Thereby, we believe that the pair is on its way to move lower during this week and a break of 1.5935 will accelerate decline.
The trading range for this week is among key support at 1.5330 and key resistance at 1.6440.
The general trend over short term basis is to the downsidetargeting 1.4225 as far as areas of 1.6875 areas remain intact.
|Recommendation||Based on the charts and explanations above our opinion is, selling the pair around 1.6025 targeting 1.6230 and stop loss above 1.5720 might be appropriate.|