By: Adrian Friggieri
I love trading cable (GBP/USD), it is very volatile pair to trade and with the correct patience and forex management skills one can bank up some pips nicely daily whilst enjoying trading. Needless to say cable is most liquid during the UK session hours with decent moves before London opening and late afternoon as US starts to open. By the way do you know why the GBP/USD is called cable? Will tell you about this in future posts.
For me it is the main pair to trade, my screen is also hovering on the daily cable movements. I done research on it in order to get my forex education and done my so called studies basing my trading skills development and strategies on this pair. But let us talk on the current market outlook instead of my passion for trading the cable which I think is more relevant here.
Since the end of April 2010 cable started a descent which we saw it taking a huge dip from nearly 1.5500 during later April trading to a low of 1.4228 touched on the 20th of May 2010. That is over 1200 pips in less than a month. Looked pretty catastrophic at the time and as I have mentioned in a few posts back, not having a proper trading plan would have meant you are going to end up wiped out 100% in no time with so many big moves every day.
As you can see in the image than the market consolidated around the 1.4315 area for a few days where support managed to hold pretty well here and in the beginning of June 2010 we saw cable starting a nice uptrend channel movement which was again a banking opportunity for some decent pips. This lasted until late last week where the uptrend was broken to a sideways movement with even possible retracements further down now as the market seems still unstable.
The 1.5020 Fibo level at 61% seems holding until now the pullback of the last days but it is very uncertain if cable now will continue its way up again or not. News also did not affect the pair is it was expected to do and this gave more to add to uncertain directions where as to the next direction of cable.
Let us see how this will develop in the next few days.