Friday, 6 January 2012

Sterling.....weak and vunerable in 2012

Below: One log scale the other arithmetic: The location of the reaction lines changes.

Below the MT automatic reaction/median line tool draws the lines after you choose the pivots and variables

These charts scream out to me (technically speaking!) weakness and its not just the fork shown and labelled in the Esignal chart as i am well aware that in a sideways market ( and that is what recent price action shows in the high time frames) it is not reliable to use the fork/centre line failure to determine future price strength or weakness. It is not unusual to see CL failures for up and down sloping forks in a osscilating market The fundamentals tell me that the UK is extremely vulnerable as is sterling that remains over valued and I expect to see 1.50 tested in the next months then lower. The short term daily stochastics point down like a trap about to snap shut but we may well come up for another small wave cycle where opportunities may present themselves for a short position.

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