Cable

Good Evening DT's,

The GBPCHF did a fake breakout yesterday and then proceeded south. This highlights the importance of employing the filters introduced by our mentors to help preserve trading capital.

The interest rate decision had a positive impact on the Cable moving it around 360 pips up. The Cable is a pair that I like to keep an eye on so here comes the analysis on it:

Strong support can be witnessed clearly on the weekly Cable chart. MACD has been making higher lows while price has been making lower lows thereby providing convergence.

A further breakdown with guidance from the daily chart shows that price has been range bound since the middle of November. Price has rallied over the last 4 days but is fast approaching the resistance zone. Price would have to break resistance for the swing trader to consider a longer term position. Will price continue up or will it head back down towards support? Some clue may be ascertained from the 4 hour chart.

What indicators are available to determine price action on the 4 hour chart?MACD is showing divergence; and more importantlyPrice is approaching a key Fib reversal level

So what's the verdict?
No one knows what is going to happen next, and you don't need to know in order to be a winning trader (Mark Douglas). Given the importance Fib plays, wait for the reversal signals to enter the trade. Conversely if resistance gets broken await the BOB and take what the market offers with ESLT and risk management.

Big news item day with NFP, GBP and CAD news.

Good Trading
Bijal Shah