For Telegram group for buying or selling cable,since last week the Cable got hammered again especially on Friday, reaching a 5-year low at 1.4655 (4 years & 9 months to be exact), which is the lowest price since June 2010. The break below the support area 1.4813/31 (the red horizontal line on the attached chart) seems to be serious, and a look on the weekly chart shows that it could have opened the way lower to one of 2 potential targets at 1.4346 & 1.3809 as I always remind you guys for 145/140 in this pair.
If we draw a line connecting the tops seen in August 2009 & July 2014, and take the parallel line to it, and place it at May 2010 bottom, the resulting line will be running very close to June 2010 monthly low 1.4346. If we take the parallel line, and place it at January 2009 major bottom, the resulting line will be running very close to February 2009 monthly low 1.3809. These levels may look far now, but they are decent potential targets for this important break.
Having said that, one cannot ignore the fact that the weekly RSI did not confirm the new bottom (please refer to the attached chart). While the price dipped to a level not seen in almost 5 years, RSI held above its most recent bottom (seen in January), to create what surely looks like a bullish divergence between the price & RSI. This does not support the case for a strong drop, on the contrary, it supports the possibility that we have seen, or about to see, a major bottom around current levels! When talking about the long term analysis, we need to keep an open mind to both possibilities, and search for other clues from short & medium term analysis, in order to help us estimate which possibility is the more probable one.
Let’s switch to shorter term analysis now. The rising recovery from Friday’s multi-year low has left behind a few important micro term levels, such as 1.4754, 1.4744, 1.4733 & 1.4742, but the most important level in my opinion is 1.4712/18. As long as 1.4712/18 holds, the possibility for a stronger recovery will continue to be. But even if we do not test 1.4712/18, we can still say that a bottom very close to any of these levels will be a positive sign. In the unlikely event of breaking below 1.4712, the Cable will be expected to continue moving south, targeting 1.4686 first, ahead of 1.4611, 1.4569 & 1.4514. These levels are all weekly extremes (highs or lows) which have been seen years ago, and they do not hold more technical significance that that, unlike 1.4346 & 1.3809 which, as explained earlier, have much more technical value.
On the resistance side, the highest price this recovery managed to reach was 1.4788 & this will be our first resistance. A break above this level will open the way towards the micro term retracement levels, which start at 1.4824, and include 1.4863 as an ideal target, followed by 2 key levels at 1.4901 & 1.4933. A break above this last level in specific will be a reason to believe that the price could very much trade above Thursday’s high 1.5019, and in this case 1.5025, 1.5065 & 1.5126 all make good targets.
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