Cable - broke support

So the cable set up seems to be playing out.

short with stop above 1.2720
it broke support and then tested that support which now look like resistance. Target medium term 1.1875 (triangle measurement)
lower  stop after today's trading

Updated chart below

Cable 2 hours

Previous post below:
Cable  looks to have broken an important support at 1.2670 (ish).
Wait for either a retest in case it's a false break or selling momentum increases to sell


Obviously a lot of Brexit news (not for the faint-hearted) but measured price target if the selling continues will be around 1.1870

Cable daily chart

Can't see the wood for the trees!

Imagine looking at an oil painting from a distance of a couple of inches? You would not see much of the whole picture, a few splodges of paint.

Sometime charts can be like that especially if one is looking at them day in day out.  So at times it is best to STAND back so one can see the whole picture. That is look at the LONGER time frames, like the Monthly and Weekly charts.  Then it may become clearer what that picture is telling one!

Monthly Charts below
Pretty self explanatory

AUDUSD

CABLE

EURUSD

FTSE

DAX

DJIA

Week 3 ..CONSOLIDATION

January week 3.

Markets have consolidated the recent gains, most notably the DAX, which had a month of up days with little correction.  FTSE flirting with 6100/6070 as support.  EURO broke through 1.33 and looks to be back testing that level, holding above 1.325.  Cable notable under performer clinging to 1.60 level.

S&P very tight range 1465/1473

Oil, gold and silver have also held their rallies, as copper consolidates

OPEX week so not expecting major change this week. 

AAPL trading dominated by emotions.  $500 key PSYCHOLOGICAL level was broken mid week, and subsequently recovered.  The POSITIVE divergence on the DAILY chart continues and it is possible that the drop below $500 has now cleared out weak hands and "emotional " selling.  AAPL has also caused to NDX to under perform so a turnaround should be reflected many times in the NDX

CHARTS

FTSE Daily

May still be a move down but would not expect 6000 to be reached, more likely 6050 if anything

More likely scenario is a break higher once this consolidation is finished with.  Targeting 6400

DAX daily

DAX also consolidating (pink box) after the strong rally from November low.(light blue arrow)

Also looks like it will be on the way to new highs once this is over.

Possible for a scary move down MAX 7560 (in the scheme of things not that big a fall, but would shake out any weak hands).  More likely we have seen the extent of this consolidation, and a break above 7800 , targets 8000 and maybe higher. 

EURO daily

The EURUSD looks to be headed higher 1.35 first target.  Projected path pull back and then rally further towards 1.40 level, which SHOULD coincide with new highs in equities and a push higher in commodities.

Cable daily chart

1.60 looked to be key level..but like AAPL probably more psychological with a lot of stops just below. More important should be 1,5970

tentative EW labeling ! Maybe we are poised for wave iii up. Target 1.63 and beyond

A drop below 1.5830 changes things

AAPL daily

NDX daily chart

The GAP up has not been filled (BULLISH)

looks to be forming BULL flag between 2710 and 2750

A sustained break above 2750 could target 2890 (measured move)

NDX weekly chart

Chart is pretty self explanatory

a sustained break above the rectangle  and we could see similar move to August 2012

2013 quick look

Quick look at the first day of trading.

FC resolved (Fiscal Cliff)

Underlying trend has been and will continue to be up; liquidity picture has not changed and Japan wants dollar yen to 90 will add more liquidity to global financial system.  Retail investors have shunned equities for a few years now.  US markets have been under-performing Europe recently, so expecting catch up, especially in the TECH sector which has been hard hit buy AAPL.

Pluses for continued upside:
Global liquidity
Transports breaking higher
European indices breaking higher
China



FTSE

December post shows FTSE breaking out, here

Looks like this will continue and head towards 6100 where stiff resistance so expecting a retrace near there. Possible short term short scalps..but safer play will be buy the dip.

DAX

 daily similar to FTSE heading to 8,000

Weekly chart shows levels more clearly

some FX

EURUSD  previous post here
Still on track for higher levels..
best guess is break 1,33 to go to 1,34..then a pull back before heading higher.

Cable  GBPUSD

Declining resistance near 1.64
1.63 also resistance
breaking 1.63 targets 1.68
extreme upside target (unlikely) 1.72

Cable update low risk short level..

Cable daily

 Now at top of the "megaphone" pattern, and also horizontal resistance.  Good low risk short level.  

Cable /EURGBP

Cable has been relatively strong recently both vs the € and the US$, why? Maybe with the continuing EURO area problems, and a perception that the UK has a more flexible economy and an independent Central Bank, there may be (ironically) a rush to "safety" !

Looking at the charts

Cable daily close up


Still trading within what looks like a BROADENING WEDGE or MEGAPHONE
Key level seems to be 1.61 (trading at 1.6060 at time of writing)
strong resistance just above between 1.61 and 1.62

CABLE daily

Big picture could still be a large Head and Shoulders formation, a break out above 1.61 probably invalidates this and resistance would then be at 1.65

EURO/GBP


Hovering above key support , break through or rally?

Cable

Cable looks like it is breaking out at 1.60, with some heavy resistance still at 1.6140; however if "everybody" is looking at the breakout we may see a "false" break up.

Strategy seems to be wait and see, a fall back through 1.60 could be a short; Many shorts probably will have covered and new longs initiated on the break above 1.60  = BULL TRAP?

Anyway the next major resistance is at 1.6140 so not far away; Another level one could short at

Looking at the chart we can see going back that between 1,60 and 1.6140 there is heavy congestion.

Also on the bigger picture, we could still be in the process of forming a large HEAD and SHOULDERS formation, significantly above 1,6165 would invalidate this pattern.

We can also see that recent price action seems to be forming a MEGAPHONE or BROADENING WEDGE, usually a BEARISH pattern. 

Cable ..BIG picture

While the markets are treading water today time to look at the longer time frames of various instruments.

Cable daily chart

The head and shoulders formation pointed out in this post seems to still be valid and actually LOOKS better as the left shoulder was a complex one and the potential right shoulder shows some symmetry with the left now.  Obviously there is quite a distance to the neckline of the formation at around 1.53,  BUT ....we could see that level if the dollar index continues to strengthen and heads to 81.  The important thing to watch is how it reacts to support at 1.53.

short term ... 1 hour chart


Looks pretty self explanatory

Cable consolidation over? or topping?

Cable (GBPUSD) seems to have consolidated it's move up from the lows at  1.53

Now at resistance near the 200 day ma, and horizontal resistance.  A significant break above clears way to 1.6140 and beyond as per previous post  here

Looking at the daily chart

This shows the horizontal resistance levels clearly

Also the recent corrective action could be an Elliott wave ABC correction.

Move from Jan low (1.5256) to Feb high (1.5898) = 642 pips

 if next move is equal to this 1.5936 + 642 = 1.6578 (ie close to 1.66)

4 hour chart

Pull back possible before heading higher..

Can be short at 1.5930 with a tight stop

Or wait for pullback and stop below 1.58

If break out higher 1.62 target off the 4 hour chart ( close to 1.6140 target off daily chart above)

GBPUSD Cable revisited

CABLE WEEKLY CHART


Still in large triangle, tested the lower boundary and now rebounded.  Also breaking a down trend from 1.67 high in August 2011, so LONGER TERM could be ready to head to the upper boundary at approx 1.65

CABLE DAILY CHART


On the daily also looks like the bear case has weakened, and if we break 1.5930 to the upside 1.65 could be possible. Some more consolidation may be needed before this, but it looks like BUY on weakness..rather than SELL on strength.

4 HOUR CHART

Awaiting ECB, BOE looking at EURUSD and GBPUSD

Looking at the EURUSD chart and awaiting ECB decision... 2 things
1. Markets are always pricing in future developments as perceived by investors
2. Market knows and has known since teh surprise rate cut by the ECB that interest rates will not be going UP in the Eurozone..

SO ...EURO shorts still at record highs...if we get a move down on the ECB news BEWARE if it is short lived..a move down and rally could be the start of a bigger short squeeze.. see chart here

Looking at cable...slightly different scenario...looks like sentiment has turned very negative and many are highlighting the break to new lows and support at 1.53.  Also many pointing out the BEARISH HEAD and SHOULDERS formation.

However, a move to 1.52 would bring in trendline support, and if EURO rallies against dollar the it is hard to see cable falling dramatically.  So a quick shake out and a rally may be on the cards...

Remember H&S patterns have a high probability of failure.   That said if the selling does accelerate, then one would have to go with it.

CABLE head and shoulders or Double Bottom?

Like many indices it seems that most are universally BEARISH on cable, euro and Aussie dollar vs dollar.

Looking at the daily CABLE (£/$) chart

The BEAR case (head and shoulders) is clearly outlined and would target 1.40 or lower

However there is pretty strong support mid term at the 1.53 level..and we may have already bottomed or one more dip lower before we rally.  Also we seems to have broken out of a falling wedge..(bullish)

Be prepared

Sometimes it pays to look at a longer time frame

Looking at the WEEKLY chart

We can see since 2009 a large triangle is playing out which looks like an ASCENDING TRIANGLE.

We are also near the rising trend line forming the bottom of the triangle and resistance is around 1.65

SOME more negative divergence CABLE

Shorted at 16210 stop 16320 open target...

If we do break higher could be an IHS formation ..
best seen on weekly chart

Of course being weekly chart important to see a confirmed break out and retest of theneck line..to avoid false breaks.

CABLE...

Looks like cable is nearing significant resistance zone...

 

Could be one more move up to 1.65 if the USD carries on being sold..

Longer term view..MONTHLY Chart

has worked off the oversold condition at point 3 

RSI is now back to neutral level

IF wave count is correct longer term should revisit lows ie 1.30 level and possibly more

CABLE

Recent rally "looks" like it could be ending, if so we could see 1.41 at a minimum over medium term.

CABLE 8hr flag broken?

Looks like cable has made up it's mind which way to break (after a nice head fake yesterday when it traded up to 1.5830),  the RSI has also broken the trend up, and MACD is starting to turn down.. NEXT level to break if we are to get a sustained move is 1.5500.

medium term targets?  There are 2 possibles depending where the "flag pole" started.
How to measure a flag formation click  here.

1
taking high on 19/1/10       16458
taking the low on 8/2/10    15534   subtracting gives us 924 pips

break today at 15687 - 924 = 14763

2 taking the high on 3/2/10 16069
     taking the low on 8/2/10 15534 subtracting gives us 535 pips

break today at 15687 - 535 = 15152

Here's a look at the 4 hr chart from the other day..cable 4 hr range (bear flag)

looking at the DAILY chart with those targets added on

Obviously if we break back into the flag significantly something else is happening...use stops!

(NOT!) Trading ranges and the waiting game..

With a holiday in the US today (Presidents Day) it seems that trading will be subdued, so taking a look at the very short term can see some ranges in many indices and currencies.  Concentrating on DAX and Cable (GBPUSD).  Unless you are nimble ranges are frustrating, waiting for that move one way or another. PATIENCE is KEY (repeat again and again!)

Look at the DAX 10 min chart:

 If we break to upside looks like potential target initially (and probably quite quickly is 5684)
, while a break to the down side targets 5324, which fits in with previous posts targets for DAX (prior post link).


Now looking at cable we can also see a range in the 4 hr chart., and this  SHOULD eventually break to the downside roughly calculated minimum target 153.42, maybe more.  IF it breaks HIGHER then it is likely the DOWN move has finished...

 

You can see some spikes up and down through the range, this is when traders are "anticipating" the break out, only to cover when it fails, and heads back into the range. Which is why RANGE trading is difficult and frustrating.

Currencies crucial levels..

Cable

Aussie dollar

Euro chart from October 09  click to see where we were..

and where we are now.  Euro looks like headed to 1.3760 support...but the major trend is now down after the break from the wedge.  If Cable breaks down through 1.57, it may be worth buying euro vs cable..

cable....key level broken

looks like a classic head and shoulders pattern...target 1.52..

And the chart from June..looks like we are entering wave 5 down..so even further downside possible...test the lows? 1.35?
www.iberianviews.blogspot.com/2009/06/cable.html

Hot summer...

the last week has been above 42 deg C here..107 deg F..

Still looking at cable..looks to have found a short term top at 1.66, now in a retracement, possible one more move up once this is done...OR..we head straight down from here..

mirroring the equity markets....

the jury is still out on whether this is a "correction" of the rally from march lows...OR if the is the START of the next leg down...

Summer trading most people anticipate as "quiet"...maybe this one will be different..

dow charts...


plus for bulls..

dow still above that down trend channel ...

trading below that will bring the bears back out of hibernation..at least for a move to 7800 maybe 7500