British Pound Breaks Below 1.9700

Cable continues to break down as price is now below 1.9700. We mentioned Friday that a" short term measured objective is at the 100% extension of 2.0131-1.9841/1.9997 at 1.9707 but we expect this decline to eventually challenge the 161.8% extension at 1.9528."

Former daily lows from late March/early April are at 1.9545/89 (there is a trendline dating to June 2006 there as well). At this point, the pattern from 2.0131 appears to be playing out as a double zigzag (which is what we suspected was playing out earlier in the week) - which points to lower levels. Price has dropped under the 55 day SMA also (the 100 day is at 1.9661).