Two trends collide
Cable was a bit of an underperformer in the US dollar rout in July but it's still closing out the month at the highs and at the best levels in 11 months.
The chart has been tilting upward in a strong series of higher lows for 9 months and the momentum is clearly higher.
That strong trend collides with an equally strong seasonal pattern in August. It's a month that has been terrible for the pound against the US dollar.
The pair has fallen in 8 of the past 10 Augusts with an average decline of 1.13% in the past decade. It fades a bit if you extend another 10 years but it's still a tough month for the pound.
The big event to watch will be Thursday's BOE decision. Look for that to set a strong tone for the weeks ahead.
