The pick of the day is Cable, forex geek name for the British pound as it dances with Ms. USA, AKA GBP/USD. The pair is still riding wave 3 of 5 bearish Elliott Impulsive waves on the 8 hour dance floor.
On the daily chart, the free fall continues since we spotted a bearish engulfing, and the pair broke the neckline of the Double Top formation we talked about on Monday, confirming the pattern. Thumbs up to you if you watched out for the confirmation and placed a sell order. The RSI is about to reach the oversold zone and is right now just above 30.
Throwing in a Fibonacci retracement on the daily dance floor, the next major level coming up is the 23% which could be perfect for our exit strategy.
On the fundamental front, the Purchasing Manager’s Index or PMI came out better than expected on Wednesday which caused a short-lived strike in cable but wasn’t strong enough to reverse the current downtrend. London is suffering at tube strike today, so this could mean a quieter than normal London session as traders arrive late or don’t bother trying to get to work! In the US we have Non-manufacturing PMI coming out at 10 am EST, where a better-than-expected number is good for the US dollar.
Stay tuned for more updates and if you feel like you’re lost in translation with this report, come one over to InvestDiva.com and check out our straightforward and easy education program.