26 April 2011 at 7:06 GMT
After moving to 16-month highs last week, Cable is consolidating below 1.6600. Monday's trading showed no significant net movement but overnight trading has seen some profit-taking develop. Supported by negative intraday momentum this temporary setback is expected to extend during today.
In view of this our call is temporarily bearish below 1.6511. The immediate objective is 1.6421 with a move beneath that point targeting 1.6386, last Thursday’s low, or even towards last week's open at 1.6308.
The risk to this call is that the decline was more temporary and limited than currently assessed and this would be signalled by a move above 1.6511, the overnight high. Prices and sentiment should then improve to 1.6555, yesterday's peak, or even towards last week's top at 1.6600.
