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The cable has been grinding upward for some time now. On Friday, we had a hammer form at 1.60 – a classic buy signal. Monday proved that idea correct, and we are now up over 100 pips from the entry point. Because of this, there is nothing to do in this pair if you are already in it. If you are thinking of entering – it should be noted that support has held, and it appears long is the right direction.
A break below the bottom of the hammer on Friday would be a bearish signal, albeit the least likely one. (1.5960) The pair looks like it will be slow moving and should be left alone as it is going to behave more like a long-term stock investment. It should rise in value, but watching it every day will make you nauseous.
Look to see the pair gradually rise to 1.70 over the next several months. Longs only at this point unless we break below the above mentioned 1.5960 level.
More March 15, 2011 Analysis:
