British Pound Sterling Looks Ugly
- Posted by JC Parets
- on February 20th, 2013
Have you guys been watching this thing? What a train wreck. We always say that the more times a level is tested, the higher the likelihood that it breaks. And the Pound against the US Dollar, or Cable, is down to the same support level since 2010 for the 6th time. Count them – six times. It’s rare to see something test the same support (or resistance) this many times. Check it out:
The psychology behind this is pretty simple. There are buyers surrounding this 153 area, or there have been at least. For whatever reason, the buyers stepped in to buy in September of 2010. After a brief rally, the market corrected once again and the buyers came back at the same 153 and change level. Fast forward almost a year and the buyers came back. And back again a few months later for the 4th time. And again last June for the 5th time.
There comes a point where anyone willing to buy down here at this price will have already bought. The more times the level is tested, the less and less buyers that are left to buy. Now that we’re here at test number 6, it just seem inevitable to me that it breaks.
Could we get a little bounce here before the buyers completely dry up? Sure. But I would be surprised if this thing didn’t crack soon…
Also make sure you check out the Pound against the Euro. Interesting action there as well.
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.blog comments powered by Disqus
J.C. Parets is the Founder & President of Eagle Bay Capital, LLC. He earned the Chartered Market Technician designation (CMT) and is a member of the Market Technicians Association. More
- Gold Miners Are Consolidating Nicely
- Paging Doctor Copper
- Register Here To Access My Favorite Charts
- Technical Analysis and Shopping Malls
- MoneyShow Video: Technical Analysis Myths
- We Started From the Bottom Now We’re Here
- IB Times: Stocks & Commodities in 2014
- It’s Time To Own Coal Stocks
- Not All Emerging Markets Are Created Equal
- How Are Assets Performing in 2014?
Archive by Year