Guest Commentary: The Cable Match fires even more Pips on the Downside!
Momentum remains key to Cable in the shorter term just as it was last February.
- We remain bearish from the 1.5605 50% retracement for another attempt at the 1.4835 low, the question remains when.
- The fact it has maintained momentum and the breaks on the downside encourages this test sooner rather than later.
- Our bullish EURGBP view and the match with the February collapse encourages us to stay short but lower stops.
Although the rally to 1.5280 could still prove to be a fourth wave correction and 1.5080 is the V=1.618xI target, Cable has a window to continue in line with our bullish and long EURGBP position and continue matching last February's aggressive blowout.
Therefore, having broken the previous 1.5160 low this (and potentially even 1.5115) should cap for continued weakness beyond 1.5035 to what will prove to be a C leg down to a C=A that coincides with 1.4835 low.
So we are staying short but lowering our stop to 1.5170 now as if and when Cable does eventually recover it should certainly reach 1.5270 but probably 1.5360^ and possibly retest 1.5605 in corrective consolidation.
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