Prices reached new 2 ½ year highs yesterday as the demand for sterling continued. Although positive momentum slowed CABLE continues to track the top of a positive Keltner channel – highlighting the current tone. Nonetheless the latter part of yesterday's price action, and in Asia, has lacked follow through and this consolidation weakens positive signals and gives the potential for profit taking.
We look for such a dip to be temporary and limited - 1.7130/40 area - with a subsequent renewal of demand then focusing on 1.7201/25 area.