Cable pushed sharply lower yesterday, despite early glimpses bullishness. Prices rallied above the get-go and managed to hit a high of 1.6603, but that did not stop the tumbling prices sharply to a low of 1,641 US before noon. This decrease was driven by lower production than expected UK PMI, resulting breaking 1646 support which was the previous low this week.
However, if you look closely the price action. we notice that the biggest drop zone does not occur when the PMI figures were released, but was more aggressive during the hours of the US at first, perhaps driven by risk sentiment in line with the S fall & P 500. in addition, the decline actually began at the end of the afternoon before the European session began with the resistance turned support around 1,678 already broken before the announcement. In addition, the manufacturing PMI numbers amounted to a strong 57.3, which is far from shabby although it is lower than the 58.2 expected. Although this number is bearish, it should not have triggered a decline of 150 pips.
Time Table
Does this mean that prices are now bearish? Considering that AUD / USD and EUR / USD move erratically, merchants can choose to file the share price yesterday to the same folder "irrational volatility" as the volume of the market may not have been fully restored. Moreover, even if unable to negotiate over 1,646 must be chalked as bearish confirmation, bears have failed to recover any winnings earned since Christmas, and even if we exchange all the way to 1635 while this may simply be regarded as the lowest correcting market after the bulls are overloaded. Therefore, it will be premature to claim that GBP / USD has now turned bearish and we will certainly need further confirmation of the bearish appropriate sentence.
Table Daily
daily chart shows that the price is about to break the bottom corner, with stochastic indicator showing a bearish signal. If this is correct, we could see a downward thrust that could lead us to at least 1626. But before we get too excited, it should be noted that the corner drawn here is not "clean" with the summary points of contact. Therefore, we need a clear confirmation that the price has broken the trend line, echoing the need for additional confirmation in the table in the short term
Links:
S & P 500 - New Hangover. Year Price Drop On Profit Taking
USD / JPY - rangebound to start New Year
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Read More : GBP/USD Technicals – No Clear Bearish Mandate Despite 150 Pip Decline
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