Cable managed to reach 1.6243 yesterday but has fallen again to a low of 1.6039 this morning in the general weakness that has prevailed over some of the currency pairs. My long from 1.6162 stopped out at breakeven.
The low today is uncomfortably close to the prior low of 1.6032. It's not that far away from key support at 1.5963. This is .382 retracement of the entire move from 1.5345, the Feb. 11 low, and confluence. 1.6028 is the rectangle's lower boundary (outlined in gray on the three-hour chart below) so it lends support.
If the pair can't halt its slide here, the next support is 1.5995 (daily 50 SMA and confluence), 1.5891, and 1.5751/25, the .618 retracement as well as below a long-term daily trend line. This would certainly support that the high of 1.6344 was the end of a monthly ABC correction.
If the pair can recover before slipping beneath 1.6032, then resistance is at 1.6198 and 1.6243. Beyond that, look for a rally, possibly making it to the 1.6367, the weekly resistance line or 1.6465, the price where wave C would equal A on the weekly ABC correction.
Here's the three-hour chart:
© Dianne Fecteau, 2011. 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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