Forex Price Action – Cable Forms Outside Bar Off Role Reversal Level – Aug. 28th
After breaking out of the summer range, the cable formed a pin bar rejection at the next resistance level and has since sold off for two days.
Today it has reached the breakout level and rejected nicely off of it, confirming it as a role reversal level. It did so forming an outside bar pattern in the process, along with a decent rejection to the downside. If the breakout is to hold, then this level should as well. Luckily there was a decent rejection to the downside today, along with a rejection to the upside so sellers are still present.
Thus, bulls can look for pullbacks into this level around 1.5750 for longs with tight stops targeting 1.5835 and possibly another attack on 1.5900. Bears can meanwhile look to sell rejections at this latter level as long as the price action shows weakness leading into it.
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Global Market Commentary:
With the Jackson Hole speech coming this Friday, volumes and volatility levels are coming down as position paring occurs before the big day and announcement. The Euro gained vs. the Greenback as there is more hopium going around the ECB will save everyone and continue to buy bonds from ailing countries…only to in turn take the revenue back from those countries it bought said bonds from (yes – its a ponzi scheme), just somehow legal.
Meanwhile, Spain continued to highlight its troubles as bank outflows outweighed deposits by 5% on balance. Catalonia meanwhile requested €5B available in rescue funds without allowing conditions (perhaps beggars can be choosers).
Although one has to wonder how much of this potential new stimulus from the FED is priced in, the bottom line is
Bank CEOs global investors are waiting for the lifeline and prop to the stock markets the FED does so well.
Notably, Gold sold off about $6.5 ahead of the Bernanke speech while the DOW only lost about 22pts.
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