Cable (GBP:USD) Heading Towards Major Support for Long Entry

Cable (GBP:USD) Heading Towards Major Support for Long Entry

My last Cable Swing Trade was a long, I remained long as it topped out and it was suggested by Wernluck (See favourite links for his charts) at that precise topping moment that a possible major top was in.

I wasn’t so sure so I let my trailing stop do what it was being paid to do… and sure enough a day or 2 later I was stopped out.

Looking back now I really wish I’d switched short because the down trend that we’ve seen over the last 6 weeks has been nice and swift.

As it stands now, Cable bounced from major support in the 1.5350 area and has since retraced to the daily 20MA. This support is so strong that a break of it would have me short without hesitation, but until that happens I’m looking to enter long from there.

You might ask why I’m not already long as it’s already bounced from this support once, well, you’ll notice with Cable that one touch is almost never enough…. it likes to revisit both Supports and Resistances before making it’s next directional decision, check out previous tests of 1.5350 on the chart to see what I mean.

I will look to enter long if 1.5350 is retested ideally looking for 1 or 2 daily closes above it, candle wicks poking through it will not put me off.

The Orange line on the chart is an area that a weak rebound might find resistance, or, an area to short from if it’s reached prior to the 1.5350 re-test. Ultimately, I’d like to enter long at 1.5350 with a target of 1.5980. That might be a far fetched call and I’m definitely not confident of it happening, but if the signals are there it’s gotta be worth a go. More compelling is the fact that if ┬áthe current 1.5328 low holds, then 1.5980 would make precisely a 50% retrace of the whole move down.

This is definitely one to watch, and one that is getting close to materialising.

The eagle eyed amongst you may consider a potential long term Head and Shoulders formation in the making, with the November 2010 peak being the left shoulder.

7 Comments
  • rhubarb
    Posted at 15:20h, 04 October

    RS, GBP/JPY has been tracking cable fairly well over the last three months so perhaps an upturn in cable could signify the major low is in for GBP/JPY.

  • RS2OOO
    Posted at 18:03h, 04 October

    I’ve had a theory for some time that the Yen will just keep appreciating against other major currencies indefinitely.

    “Indefinitely” in this case has to come to an end at some point, and there will be rallies against the Yen that could go on for considerable time, but, ultimately, I think GBP will in the longer term continue to depreciate against the Yen unless some major intervention (SNB Style) takes place.

    It would not suprise me to see some sort of Capitulation sometime in the next year that would see GBP trading at 105 against the Yen.

    Oh why did I close the 126.50 GBP:YEN short!!!

  • This Weeks Swing Trading Round-Up
    Posted at 00:43h, 08 October

    […] one trade I didn’t take this week was the Cable long (GBP:USD). It did re-test support as I thought it should, but I just didn’t feel comfortable about […]

  • joe moon
    Posted at 12:05h, 12 October

    shame you missed that one in hindsight

  • RS2OOO
    Posted at 17:43h, 12 October

    Yeah, it is a shame because I really fancied the trade.

    I got some abuse on the bb for calling a long from 1.5350 too. Price now over 400 points higher.

    To be fair, I think I was a bit overloaded with open positions at the time it bottomed out so didn’t give it the consideration I should have.

  • This Weeks Swing Trading and Day Trading Round Up.
    Posted at 19:20h, 14 October

    […] ideal entry for the planned Cable long was missed as I just couldn’t be at the screen at the right times and I’m not one for […]

  • GBP:USD Cable Swing Trade Analysis For November 2011
    Posted at 14:33h, 30 October

    […] previous analysis where Cable was heading towards resistance in the 1.5980 zone we have seen a continuation of that […]