Hi there this is Steve Miley for forextraders.com and we’re now taking a look at the Pound against the US dollar cable spot FX rate.
Well, a small head and shoulders topping pattern in here forming – you can see the head and shoulders in here: shoulder, head and shoulder – broke down / accelerated down through the neck line yesterday and also through this tentative up-trend line that comes in here from earlier in September.
All of that signalling a short term topping pattern taking us down to 1.2344, just holding above 1.2331 support. That signals a more negative tone in the very short term and for today we see risks down to those supports of 1.2344 / 1.2331 and potentially as deep as 1.2282.
Critically, down here is the 1.2231 level and should that level surrender we would shift our intermediate term view from bullish to bearish, so that’s a real threat on a longer term outlook.
But the short term threat certainly to the downside. The market is going to have to clear back up above 1.2436 in here to start to ease the immediate down side risks for today.
Have a great trading day.