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Market Insight: GBP/USD ("Cable")

By Vadim Pokhlebkin
Thu, 10 Jan 2013 13:30:00 ET
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If you look at the chart of GBP/USD, commonly referred to by forex traders as "cable," you'll see the same picture you see now in U.S. stocks -- but in reverse.

Cable started the year with a huge slide, but for the past week or so, it's been moving sideways (Elliott wave labels not shown):
Here's what EWI's Currency Specialty Service editor Jim Martens has to say about cable in one of his recent intraday updates (excerpt):
Jan 10 2013 9:52AM ET: An observation. Cable has rallied in tandem with EUR/USD and USD/CHF, but it has not joined its peers by moving beyond its January 8 extreme. Instead, it has retraced [a Fibonacci] 61.8% of the decline from 1.6131...
This "divergence between these correlated markets" may have important implications for GBP/USD in the near term.
Jim is on the lookout for a move "in 5 waves at small Elliott wave degree" as a confirmation of the next significant change in trend.




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