Improved market sentiment
- global fx
- Feb 4, 2015
- 1 min read
With the euro rallying, the dollar has come under some corrective pressure and this is helping to drag Cable higher.
The trading day yesterday has in no small way improved the outlook for sterling. A bullish engulfing candlestick (bullish outside day bar) has improved the sentiment of the chart taking Cable above its 21 day moving average and although there is still much to be done for the bulls, this is a good start if there is going to be a technical rally. The momentum indicators have also taken on more of an encouraging set-up.
The daily RSI is at a six week high, with a hint of a bullish divergence, the MACD lines are now beginning to improve and the Stochastics are also improving. The intraday hourly chart shows once again that the resistance around $1.5200 is the barrier that the bulls need to break through to suggest further gains can be achieved, and yesterday the peak came at $1.5196 before leaving a negative shooting star candlestick.
This suggests that if the bulls can break through $1.5200 and sustain the break, then we can begin to seriously think about this as a rally to back. Above $1.5200 opens $1.5270 and then $1.5320. Support is now in the band $1.5100/$1.5135.
