Cable Crosses Stall at Important Resistance - Additional Bearish Potential Exists


GBPJPY - The rally from 221.10 can be counted as a 9 wave advance. 9 waves is really 5 waves with an extension. It doesn’t matter which wave is the extended one, the point is that there are 5 waves in one direction, thus probability favors at least a setback. Daily MACD is attempting a bearish cross and the pair has stalled just below a previous significant high (1/30 high at 240.11). The 4/19 low at 235.18 is the initial bearish target on a break below short term support near 238.45.

GBPCHF - As we said last week, “The rally from 2.3288 has stalled near the 61.8% of 2.4757-2.3288 at 2.4196 and the form of the rally is corrective.” Given continued failures near this significant Fibonacci, our outlook remains largely unchanged for a medium-term bearish turn. A crossover on the daily MACD suggests that the short-term outlook is bearish. Coming under 2.0045 would strengthen the bearish case.

GBPAUD - The consolidation that has taken place looks like a 4th wave correction of the 3rd wave decline from 2.5017-2.3778. The pair has stalled at the 38.2% of wave 3 at 2.4248 and yesterday’s shooting star is bearish. The next move should be in a 5th wave lower (while 2.4261 remains intact) under 2.3778. Support is at the 4/26/2006 low at 2.3671 and wave 5 would equal wave 1 at 2.3429.