Is the short-term Cable ready to exhaust?

There’s strong confirmation that the 15-minute GBP/USD has put in a top as price action has created a ceiling along the highs of 1.5701 and 1.5692. The 15-minute chart is currently in a distribution market cycle which makes the exhaustion fade off this ceiling an agressive way to short sell the weakness – if confirmed by an overbought Stochastics.

(FYI: I like to use a smoother, slower 21, 1, 3 setting on my Stochastics)

8-17-2010 GBP 15.png

Chart date range 12-Aug 22:45 GMT-> 17-Aug 05:45 GMT
Data Interval 15 Minutes

The challenge for trade is trade follow-through. The expectation for the Cable to simply sell-off sharply from here would be in contrast to the uptrend that is still in place on the daily chart despite the recent correction.

While the support around 1.5640 is a tempting downside target, keep an eye for 1.5659 tp offer near-term support. Additionally the 60-minute chart (which is in a very shallow uptrend) has a swing buy and 34 period EMA high support at 1.5658.

Analysis
Rising Wedge identified at 17-Aug 01:15 GMT. This pattern is still in the process of forming. Possible bullish price movement towards the resistance 1.5701 within the next 3 hours.

Supporting Indicators
Upward sloping Moving Average

Resistance Levels
(D) 1.5701 Last resistance turning point of Rising Wedge.
(B) 1.56921 Last resistance turning point of Channel Up.

Support Levels
(A) 1.56595 Last support turning point of Channel Up.
(C) 1.56363 Last support turning point of Rising Wedge.

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