FXA - Cable near term outlook: GBPUSD eventual gains above 1.6300/15

FXA - "Cable near term outlook: The market has finally reached the long discussed 1.6300/15 resistance area (Apr/Sept highs), and with an eventual upside break still favored. Though this 1.6300/15 resistance area may hold for a few days, the upside pattern from the Dec 7th low at 1.6005 is not "complete" (currently within wave 3), the seasonal chart points higher into the end of Dec, and the daily macd remains in buy mode, with all adding to the view of eventual gains above 1.6300/15 after. Nearby support is seen at the bullish trendline from Dec 8th (currently at 1.6170/80), and the bullish trendline from Nov (currently at 1.6080/90).

Strategy/position: With eventual gains above the 1.6300/15 area still favored, would stay with the long position that was put in place on Dec 13th at 1.6085. Given the near term risk for a few days of consolidating, would continue to use a wide stop on a close below the month long bullish trendline (currently at 1.6080/90). Though that much of a near term pullback is not favored, don't want to get stopped if this near term pullback is deeper than expected. But with further gains above the 1.6300/15 potentially limited, will want to quickly switch to a much more aggressive stop on such a move higher (to compensate and maintain a good overall risk/reward in the position)."

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Tags: Cable, David Solin, FXA, Foreign Exchange Analytics, GBP/USD, GBPUSD

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