The cable rate (£/$) has dropped, extended, bounced and then compressed:
This shows neatly that the life of a daily-scale extension signal is measured in only a few weeks, as the compression came 19 days after the last extension. Now that this compression has broken down, bounces back toward it should be sold – the compression low is 1.4412 and today’s bounce high is 1.4393 so that may have been all the bounce we get. The ‘will they/won’t they’ Brexit debate is obviously the dominant feature when looking at the pound and the ‘Leavers’ are currently gaining ground. Leaving the EU would not necessarily be bearish for the £ but that’s the way the market is interpreting the flow of news at the moment.
