GBPUSD (CABLE) LATEST SCENARIO 24/02/15

My dear friends and readers here,today’s chart is a 4-hour chart, and it clearly includes a wedge, that the price moved within in a very exciting very accurate way, before breaking it to the downside as expected (the expected direction of the wedge break is the opposite direction to its nose: this wedge is pointing to the upside, therefore the expected break is to the downside). The implications of this break are definitely bearish, but I think they will be relatively limited because the price has already broken above the top of the daily channel which we talked about in my previous analysis. Breaking above the top of the falling daily channel from July’s top means that the general atmosphere is bullish, and that any setbacks, like the one expected upon the break of this wedge, should provide good chances to buy.

So, let us consider the bearish possibilities first. The Asian session’s low 1.5430 is our first support. A break below this level will open the way lower towards the micro term retracement levels at 1.5403, 1.5386 & 1.5372. A break below this last one will be another sign of weakness, which should target at least one of the short term retracement levels which start at 1.5329, followed by the first Fibonacci level at 1.5278, an ideal target at 1.5216, and 2 key levels at 1.5153 & 1.5102. Since we have a wedge, the price target could be one of those retracements, but it could also be below the bottom of the wedge itself (which is 1.4989). However, the fact that we have broken above the top of the daily channel, makes it hard to imagine a drop that will break below 1.5102.

As for the resistance, first we have last week’s trend top 1.5480, which is also very close to the bottom of the wedge, which means a break above 1.5480 will take the price back inside the wedge, which is not expected. But in case this actually happens, he price will be In this case we have potential targets at 1.5504 which is a minor level, 1.5552 which is a Fibonacci retracement & 1.5587. Higher, more interesting targets include next level at 1.5625, and the ideal Fibonacci level at 1.5738 in my opinion before long term bearish back to below 1.5000 handle again.