Cable has recouped to the 1.2500 area amid the dollar’s flurry lower. An intraday low was left at 1.2418, which left both yesterday’s low at 1.2406 and the 50-day moving average at 1.2402 unchallenged. The government lost its appeal in the case about Brexit process at the Supreme Court, as had been mostly anticipated. Given the ruling Tory-party’s majority, and pledges from many Labour MPs not to obstruct the will of the people, the government should be able to put through a succinctly-worded bill through the House of Parliament and the House of Lords, though the Scottish National Party has already said it will be gunning for 50 amendments. Expectations remain for Cable to maintain a range in the low-to-mid 1.20s for now, but I still see risks being skewed to the downside in the face of Fed tightening and ongoing likelihood for ongoing messy Brexit-related wrangling. UK Parliamentary procedure is seldom straight forward or risk free.
Elsewhere, I took a SHORT position on EURAUD with an entry at 1.4140. This had a set up similar to the GBPJPY trade earlier with a strong spike down last week to a new low. The reverse has not been as pronounced as the GBPJPY but is similar. The retrace has paused at the 23.6 Fibonacci level and the trade is against the higher timeframe trend. Therefore target 1 remains less than the 14 DATR and south of a strong resistance area at 1.4290. The confluence of the 20 and 50 DMA together with the 38.2 Fibonacci level will provide strong resistance for target 2 at the 50.0 Fibonacci level and 1.4375.
The RSI remains negative along with the Parabolic SAR and should the 20 DMA cross below the 50 DMA then this too would be a negative and add to the risk of this trade and suggest a resumption of the longer term downtrend.
https://analysis.hotforex.com/ has had a 100% start to 2017 with five trades achieving both Targets 1 and 2 and this sixth trade hitting target 1 for a total net gain of 1218 pips.
Click here to access the HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our latest webinar and get analysis and trading ideas combined with better understanding on how markets work.
Click HERE to register the next webinar will start in:
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.