Chart of the day: Cable not out of the woods yet
Following British Prime Minister Theresa May’s audience in the White House on Friday, we look at the outlook for cable – a combination of probably the most hated currency currently and a favourite among consensus opinion. From a purely technical standpoint, since Britain voted to leave the European Union in June, setting a new record for futures contract volume and implied volatility, it has lost 20 per cent of its value (excluding the dubious slide in early October). At its most oversold since the slump in 2008, no further losses have occurred. Instead, the bullish engulfing weekly candle suggests an interim double bottom at US$1.20 is in the making. However, only once it has cleared US$1.30 can the risk of further downside probes be avoided.
Nicole Elliott is a technical analyst