So, the FX market is in the middle of the summer doldrums. This has happened many times before, and will do so again. The best reaction is always `when in doubt – stay out`. But in the mind of traders, periods like this just sharpen the senses; there is a sense of an impending move and everyone wants to be on it. This should always be a warning signal, and come with a government health warning attached, because often a move can get exaggerated as the market tries to make `something happen`. So, it is usually worth scrutinising this `break out` as and when it occurs, perhaps a little more thoroughly.
I get the sense that Cable may just be that animal. The (perhaps) counter intuitive bulls, have tried hard to push the pair higher, but now one senses that a generally weaker $ may be needed for that to happen. Ideal circumstances I would think for the Governors remarks tomorrow to possibly be interpreted in an overly bearish fashion. It looks to be the line of least resistance, and with the market as twitchy as it is………
