The GBPUSD has taken a beating since early November; so is a bottom in site? Maybe…there is significant support near today’s low. Two 161.8% extensions (2.1160-2.0353/2.0831 and 2.0830-2.0180/2.0576) are at 1.9525 and 1.9523. Also, a line drawn off of the 11/16 and 12/24 lows intersects with today’s low. Not to mention, the spike below 1.9500 (which is a psychological support in and of itself) sets up a nice bear trap. At this point, there is no clear trade because there is no clear risk. Keep abreast of developments by checking the technicals daily or by visiting the Elliott Wave forum.
The % of total commercial positions that are long measured through a 52 week percentile is at 98 and the % of total speculative positions that are long measured through a 52 week percentile is at 0. The 52 and 13 week COT Indices are both at 0. Readings such as this are VERY rare. Indeed, the last reading that was this bullish for Cable was in November 2005 when the GBPUSD bottomed at 1.7047. For more on the COT, visit COT.
