#CABLE's surge above 1.3600 levels due to speculative trades of an expected rate hike in November maybe dented from London's attack at the opening session by Monday in Asia heading towards the European sessions. While its price action has been justified well surpassing its previous high range at 1.3223 - 1.3268 the directional trend for the Sterling Pound or GBPUSD would still be intact in spite of the probability of a corrective move due to fundamental factors.
The USD initial price recovery have paused as the surge on the #GBPUSD managed to play out well compared with the single currency #EURO likewise with an interim rally towards the 1.2092 have lost its steam giving a mix signal in the market. And affected the obvious contagion effect on the #EURGBP Cross rate. That led to a dramatic decline at 0.8774 from a high at 0.9226.
By watching the relative price action of these major currency pairs including the #USD- #DXY prices their relative 'CORRELATION' has everything to do with a trader's course of action. Technical indicators are simply used as a guide; lagging as they are after the fact that prices have moved ahead of these indictors. The DXY have found a base range that can hold daily price action towards the recent high. But there is still no actual confirmation of a trend reversal that is seen with the exemption that this base range may hold true by the end of the month's trading. For now, 91.00 low may have a retested but really depending on CABLE's run would loose steam for the time being.
Watch for the Asian turnover sessions towards European trading where an increase in volatility would be expected as we all draw closer toward the last two weeks of the 3rd quarter period.
Volumes are great to define momentum. While monitoring Open Interest in the Currency Futures along side the CFTC Commitment of Traders report will always outweigh technical trading patterns.
ReplyDeleteAlthough, such patterns are equally useful for day and swing traders alike when short term trade positions are made. One has to define if they are investors or simply traders taking advantage of a price difference in exchange of the risk of loss.
Indeed, the Sterling Pound has been dented with a low price at 1.3464 after reaching 1.3616 high last week. It has been VALIDATED further with a slight rise of the USD except it needs a little more juice for a serious price recovery.
ReplyDeleteNot only did CABLE declined, the initial price recovery of the USD have pushed GBPUSD now currently trading below the 1.3400 after coming from a high at 1.3616. Let's see how CABLE and USD ends the 3rd quarter that would provide traders and investors a glimpse of what is to be expected.
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