FxWirePro: Cable’s Interim Bulls Jittery At Channel resistance, Consolidation Seems Intact – Trading & Hedging Setup

Cable (GBPUSD) is plunged from the peaks of 1.3267 to the current levels of 1.3072 levels.

The minor trend travels in rising channel pattern, while bulls breakout stiff resistance, the current price hovering at 7 & 21-DMAs, shooting stars & dojis indicate exhaustiveness at channel resistance as both leading & lagging oscillators are also signalling overbought pressures.

We have observed sluggish intraday volatility and, prices seem to be drifting into a range towards 1.2980 levels, and strong support region at 1.3036 (21-DMA levels).

A clear break of 1.3036, 1.2980 and 1.2818 areas would suggest a further shift back into the previous range, with 1.2818 - 1.2052 areas but seems unlikely. While over 1.2455, the longer we can develop a range, the greater the chance that we still see a move towards 1.30-1.32 levels also.

Bearish engulfing, hanging man & shooting star pattern candles signal intensified bearish momentum, consequently, the current price is attempting to nudge below 7-DMA, both leading oscillators are in line with prevailing downswings.

On a broader perspective,

The consolidation phase looks to be healthy as the current price spike well above 7, 21 & 100-EMAs as both leading & lagging oscillators in tandem with the uptrend (monthly chart). Hanging man & bearish engulfing patterns (in short-term trend) disrupt the consolidation phase.

Trading tips:

Contemplating above technical rationale, at spot reference: 1.3075 levels, tunnel spreads are advocated on trading grounds with upper strikes at 1.3150 level and lower strikes at 1.2980 levels.

Alternatively, on hedging grounds, activated shorts in GBPUSD futures contracts of August’20 deliveries with an objective of arresting potential slumps, we wish to uphold them for now.