The cable extending its rally towards the previous swing highs at 1.70 levels. The cable has been taking support at 1.6696 levels and trying to breach the previous resistance at 1.7043 (August 2009 high). Fresh buying will be above 1.7043 for 1.7280, 1.74 and 1.7520 levels. The monthly RSI favors new highs, but the monthly Stochastics is indicating a negative divergence. So we are requesting traders to wait for a clear indication (a breakout above 1.7043). The support level is at 1.6690 and 1.6440 levels.
Weekly basis-
The pair covered its 4-week losses in just 1 week thanks to the fundamental factors which supported the cable to move back to its peaks. Currently it's a tight situation for the bulls and bears, if the cable breaches the 1.7045 levels, the bulls will have an upper hand to make new highs. In the last week's trading session, the cable exactly touches the upper Bollinger band at 1.6992. We are in a neutral phase of this current situation. The cable has a rough road ahead at 1.6696 and 1.7043 levels. The middle BB and the 21-week EMA are supporting the cable. The RSI in the weekly chart has been consolidating at the overbought levels.
Resistance zone- 1.6696-1.7045.
Support zone- 1.6738-1.6693.
Buy above 1.7045.
