In yesterday’s cable update I highlighted 1.5350 and 1.54 as being the two key levels which should tell us whether we’re still in correction mode, or the correction is over. This morning, the pair broke below 1.5350 at the fourth time of asking, bringing 1.5315 – 1.5320 into play. The former is a support level from the middle of February and the latter is the 38.2% retracement of the move from 23 January lows to 26 February highs.
While this did provide some temporary relief, it wasn’t too long before this level was also broken, prompting a move back towards 1.53, which is already coming under considerable pressure. This is a previous level of resistance so may hold as support, especially as the 50-day SMA also falls around this level. That said, it isn’t currently looking good.
If we see a break below here, the next big support could come at 1.5250. Not only is this a round number which can quite often prove to be good support and resistance levels, it is only the 50% retracement of the above move. Just above this as well we have the 200-period SMA on the 4-hour chart which has historically proven to be a reliable support and resistance level, although not necessarily to the pip.
Below here the pair may find further support around 1.5220, 1.52 (both previous support and resistance) and 1.5180, the 61.8% retracement of the above move.