I looked at Cable’s 4-hour chart and the broken resistance has held as support for the second time. Since testing support at 1.5550, the pair has been slowly climbing. With the Stochastic crossing over, it seems that Cable could be a move higher, possibly towards former highs at 1.5770.
I don’t want to get left behind in the event of a strong rally so I chose to buy at the market with a relatively tight 70-pip stop. I’m ultimately aiming for new highs, but as I said, 1.5770 is already a reasonable target. In any case, I have split my position into two to make it easier for me to manage my position.
I’ll be honest and admit that the pound doesn’t look “A-okay!” on the fundamental side of things. For one, yesterday’s roster of economic data from the U.K. came in mixed as reported by Pip Diddy. On top of that, there also seems to be widespread pessimism over the EU Summit which is also weighing down on higher-yielding currencies.
But as we all know, anything can happen especially in the forex market. Who knows, perhaps the pound will rally with the release of the U.K.’s current account and final GDP report, or maybe positive developments in the EU Summit would spark risk appetite. For my account’s sake, I sure do hope I’m right!
To recap, here’s my plan:
Bought at market (1.5590), PT1 at 1.5770, PT2 yet to be determined, SL at 1.5520. Risk disclosure.
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