Starting from the top this morning, the broken weekly Quasimodo level at 1.4501 has now officially come into view. Whether this long-term structure holds firm or not can only really be determined by the weekly close in our opinion. Climbing down into the daily chart, nonetheless, Cable extended its recovery from daily demand at 1.3843-1.4036 for the third consecutive day yesterday, printing a near-perfect full-bodied bullish candle. Despite this, there could be trouble on the horizon as price connected with not only the weekly level just discussed above, but also a daily resistance drawn from 1.4079.
Stepping across to the H4 chart, the recent buying has completed what looks to be a Harmonic AB=CD bearish pattern, that fuses just beautifully with the aforementioned daily resistance level and trades in-line with the predominant trend. Therefore, we have taken a short entry at 1.40780 and placed our stop around the 1.4170 mark. Granted, this a large stop, but considering the higher-timeframe levels involved (see above), we’re also expecting a large decline. Ultimately, we’ll be looking to take partial profits around the 1.3950 region due to the H4 demand surrounding this level to the left at 1.3914-1.3969.
Stepping across to the H4 chart, the recent buying has completed what looks to be a Harmonic AB=CD bearish pattern, that fuses just beautifully with the aforementioned daily resistance level and trades in-line with the predominant trend. Therefore, we have taken a short entry at 1.40780 and placed our stop around the 1.4170 mark. Granted, this a large stop, but considering the higher-timeframe levels involved (see above), we’re also expecting a large decline. Ultimately, we’ll be looking to take partial profits around the 1.3950 region due to the H4 demand surrounding this level to the left at 1.3914-1.3969.
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