The spike to a cycle high in cable today was followed by a retracement back to unchanged on the day. That could be an early sign of a top in GBP/USD.
The pair has climbed for five straight weeks and a cool-off ahead of the January highs would be normal and healthy. In the longer-term, the pair is also facing resistance from the downtrend that started in mid-2009.
cable long term
At this point, however, I would be tentative. Any trendline is a minor technical feature, especially one that hasn’t been tested multiple times. A more definitive feature is the double bottom from this year and the measured target of that formation is around 1.6820.
Cable daily
On balance, I like the downside but I would prefer to wait for more technical evidence before betting on a near-term decline.
