GBPUSD (CABLE) LATEST SCENARIO 26/02/15

For cable fan, here is the most exciting thing seen in the past 24 hours on this front was topping at a new 7-week high during the Asian session. Reaching 1.5552 was a triumph for our Fibonacci analysis since this is the first medium term Fibonacci retracement level, exactly & down to the pip! This move higher absolutely goes well with breaking above the top of the daily channel. The Cable is expected to achieve more short term & medium term gains. However, topping at a Fibonacci level, is a reason to be vigilant.

The first resistance is definitely the medium term Fibonacci 38.2% retracement at 1.5552. A break above this level will boost the outlook, and shake the fear of a Fibonacci top off. This level is followed by 1.5587, and above here we start to approach more interesting levels include another level at 1.5625, and the ideal Fibonacci level at 1.5738. A break above 1.5552 is expected to further boost the outlook, while a top very close to it is not very good for the bulls.

Having said that, we can never rule out the possibility of a falling correction in the shadow of recent gains, especially with the stopping this accurate at a Fibonacci level. First support is the area between the Fibonacci 50% & 71.4% for the small rising move from yesterday’s low European session low (1.5467) to the 7-week high & probable Fibonacci top 1.5552. This area starts at 1.5510 and ends at 1.5491. We should treat these 2 levels (and the Fibo 61.8% in between at 1.5499) as one area. Finding support anywhere within this area or just out of its borders would be a positive sign. On the other hand, a clean & clear break of 1.5491 would be a weakness sign. A break below this level would give the bears a chance to pull the price towards the micro term retracements at 1.5468, 1.5442, 1.5416 & 1.5395. Testing at least one of those levels will become highly probably once the price breaks below 1.5491, but breaking below all of them is not expected for today. In case the bears show surprising strength & break below 1.5391, the drop will be expected to continue moving towards the short term retracement levels which start at 1.5322, and include other important levels at 1.5294 & 1.5252.