Cable has been trading very much akin to a commodity currency since the turn of the year and well, I guess that says a lot more about what is driving the pair in the past few weeks. It is largely about the dollar side of the equation and I would argue to some extent the technicals as well, if you go by the chart as seen above.
The BOE and Fed are well on their way to hike rates and a lot of that has been priced in, so a major fundamental divergence in terms of policy isn't exactly a go-to when trying to manifest a trade potential in that respect.
As such, it is largely more about risk swings and dollar sentiment more than anything else in my view at the moment.
The former is taking precedence in the past two weeks and that has seen GBP/USD fall from its 200-day moving average (blue line) to where we are now. The drop earlier in the week reached 1.3436-40 but was defended by daily support at the 50.0 retracement level @ 1.3455. That remains a key supportive region to watch moving forward.
Despite the bounce back to just above 1.3500 currently, sellers are still very much in control of price bias in cable.
The 100-day moving average (red line) stands at 1.3530 and there is also near-term resistance from the 100-hour moving average @ 1.3536 currently. Those will be key upside levels to watch in terms of limiting gains as we get to the Fed later.
As such, the recent bounce may be a good platform for buyers to build upon but only if they can get past the resistance region above. Otherwise, sellers will still feel incentivised to lean on those levels to try and take another run at the support region of 1.3436-55. That pretty much defines the range at play now for cable.