GBP/USD: the retracement on Cable over the past few sessions has been considerable [Video]

GBP/USD

The retracement on Cable over the past few sessions has been considerable. A move back from $1.3515 has lost over 500 pips and the decline this week alone is one of the biggest in years. It is interesting to see the move back to the breakout around $1.3000. Throughout October into November the market was restricted around $1.2975/$1.3010 and this is now a basis of support. There is also the 38.2% Fibonacci retracement (of $1.2193/$1.3515) at $1.3010. This is a potential consolidation point for this correction. A decisive closing breach of the 38.2% Fib would open 50% Fib around $.12855. We have bee advocates of using this correction as a buying opportunity. However, if the 38.2% Fib level is decisively breached then we may need to reassess this view. Momentum indicators are at key levels with the RSI around 50. We see this as a key crossroads moment for Cable. Hold this support with momentum and the outlook will remain positive. A breach would continue the correction. Resistance at $1.3050/$1.3130.