Situation on the Cable changes like on a rollercoaster. Thursday last week was perfect. The price broke out from the symmetric triangle (red lines) and started an upswing. That triggered a mid-term buy signal on this instrument. As we can see now, this signal was fake (orange area). After that breakout, we stopped on a horizontal resistance on the 1.257 and that was actually all from the bullish camp. Price went down sharply and erased gains from almost whole week. The beginning of the new week brought a further weakness and in this environment we start today/s analysis.
That drop is largely contributed to the fundamental side of the market as we are about to experience another Scottish Independence Vote. We will see, what the future will bring but that news were not taken easily by the traders. Downswing stopped on the 1.238 (green area) and this will be the crucial support in the mid-term. As long, as we stay above this level there is not panic here, just a huge concern. Breakout can be lethal and can trigger a strong sell signal in the mid-term so breakout traders should watch the situation carefully. The closest resistance is 1.25 (blue lines) and we can assume that as long as the price stays below this level, bearish scenario is more probable.
