What a week for Cable! And for Cable Bulls!
- Bank of England governor Mark Carney has overhauled the Bank's interest rate policy to reflect falling unemployment and the economic recovery.
http://www.bbc.co.uk/news/business-26153122
- And Mrs Yellen has the Helm at the Fed, she's going to keep cutting...
http://www.bbc.co.uk/news/business-26136873
Technically speaking
GU4H
Cable remains in a technical uptrend over the medium term since Bernanke's no don't worry, we'll keep printing money speech on the... 9th July 13 or so
More recently a bearish engulfing pattern stalled Cable at 1.6670 where after it dropped to test key support at 1.625x / 1.626 which has been strong support for some time. It’s interesting to note that the 200sma has acted as a key trigger for both minor bear and major bull movements on this TF (read institutional traders are probably trading this TF) The R/R using the 200 has been quite noteworthy
The 50 sma is less reactive can act as a dynamic S/R or trailing SL
Interestingly the bearish engulfing pattern signaled that the large symmetrical triangle would break south and terminated in a classic hammer, confirming support. Price then reversed through a frying pan bottom chopped its way up to above the 200 where after the bulls ran with it and push new multi-year highs after some encouragement from Carney and Yellen.
The formation of a classic bearish advance block tells us the bulls are also happy with their gains but given the overall up-trend bears should be cautious about blindly shorting on Monday without strong confirmation the trend remains up exactly at the point where the 200 & 50 sma are signaling a golden cross (very late signal) none the less a strong institutional signal to remain bullish over the medium term