GBP/USD - 1.9927...Cable maintained a firm undertone in Asia yesterday
and staged a rally in the European morning, when the price subsequently rose to
1.9968 before retreating at European closing session. As the near term erratic
upmove from last month’s low at 1.9677 has briefly penetrated the ‘dynamic’
61.8% retracement (1.9959) of the fall from 07’ high at 2.0134 n price is
currently trading above the trend-following 55 hour EMA (circa 1.9891),
suggesting that an upside bias remains for further head-way toward daily chart
objective at 2.0000, a daily close above there would be the signal that the
medium term uptrend has resumed and bring a re-test of 2.0134 later this
month.
Therefore, buying sterling on a marginal pullback is favoured for a re-test
of said yesterday’s high 1st and then toward 2.0000 but as hourly oscillators
would be displaying bearish divergences on the next rise, reckon price would not
be able to close above 2.0000 today, so profit must be taken on next upmove.
On the downside, inthe event cable penetrates 1.9851 (50% r of 1.9733-
1.9968), then bullishness would be deferred as risk is seen for a stronger
retracement of the aforesaid erratic rise from 1.9677 to 1.9823 (50% retrace)
but reckon 1.9788 (62% retrace) would hold from here…