Cable Patiently Waits Below Crucial Resistance

In December, 38,2% acted as a bullish stronghold, stopping the bearish correction, which started in June. We are not surprised as 38,2% Fibo is famous for doing that.

The correction itself was a very beautiful flag (green lines) and what makes it even more beautiful is that the movements inside of this flag were in line with the Fibo levels mentioned above. OK but how can we use it in our favor? First, we need to check where we are now. The price is currently waiting on a combination of two important resistances. A horizontal resistance, so a 38,2% Fibo and a dynamic resistance, so the upper line of the flag. You can imagine how crucial those levels are for the future of this pair.

Price breaking those two, would trigger a new long-term buy signal, which would possibly give us a long, bullish wave, possibly lasting for weeks. On the other hand, price bouncing from this area sharply, would delay or even cancel that scenario.

We need to be patient and wait for the price action to give us a proper signal. We can look for hints elsewhere. EURUSD and Dollar Index are currently locked inside of very narrow sideways trends. Breakout on those two instruments should show us the direction for the American Dollar, so in consequence for our instrument as well. Buyers on the GBPUSD need the weaker Dollar. Everything for the buy signal on Cable is ready. All we need to see is the price closing a weekly candle above the 23,6% Fibonacci.  Chances for that are quite high.

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