Cable (GBPUSD) to Slide Lower – May 18, 2010

May 18, 2010 12:07 AM ETALT, USD
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Contributor Since 2010

Ron Acoba is the co-founder and managing partner of LaidTrades.com. He has been involved in the financial market since 2002. Technical analysis is his main tool in forecasting price action of equities and forex but he is also versed in fundamentals and financial analysis. He has an MBA degree from the University of the Philippines. Presently, he is also pursuing a CFA and a CMT charter.

Several bearish signals can be seen in the Cable’s (GBPUSD) 3 hour chart. After dipping to a low of 1.42512, the pair has rallied towards the 1.4500 marker. It, however, has been finding some resistance at 1.4500. This level, if you notice, acted as a support couple times in the recent past and could now switch its role as a resistance. The 38.2% Fibonacci retracement level also perfectly falls in line with 1.4500, making it a tougher hurdle to overcome. A bearish divergence, where the price makes lower highs and the stochastics register higher highs, is likewise present, suggesting that traders could soon jump back in to sell the pound in exchange of the dollar. Moreover, a rising wedge formation can be spotted as well. A breakdown from this formation could send the pair down at least to 1.42512. More...



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