I'm still long from 1.5419 and I added another position yesterday at 1.5602 as the pair looked stronger as the morning went on. Cable has reached a high of 1.5682 yesterday and it's struggling with that now. While it has climbed above the top of the daily triangle, there is still the strong resistance at this level that I wrote about yesterday. The resistance consists of a weekly channel resistance price and the weekly 20 EMA of 1.5651 as well as some fibos.
Yesterday, I showed the triangle on the daily chart, which it is now slightly above. I've drawn a blue line on the three-hour chart below to show that the pair could be in an upward rectangle (possible bear flag especially since momentum is negatively diverging from price). The low of this would be 1.5451. I'm not sure the triangle is dead. The rectangle is just another way of looking at the price movement. However, a sustained close above 1.5680 would be significant. Additional resistance is at 1.5710/40. After that there's little significant resistance until 1.5912.
Below 1.5451 is support at 1.5345, 1.5297 and 1.5210 (double top—1.5604 and the trough is 1.5407).
As I wrote about the Swissy, it's unusual for both the USDCHF and GBPUSD to be trending upwards together. I expect the two will diverge at some point, possibly later today.
Here's the three-hour chart.
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
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