Cable buyers facing stiff opposition at key resistance hurdle

Technical Analysis

Author: Justin Low | gbpusd

GBP/USD falls to the lows for the day of 1.3770

GBP/USD D1 20-10
The close yesterday also fell shy of taking out the 100-day moving average (red line) and we're seeing a further rejection of that as cable slips back below 1.3800 to a low of 1.3770.

One can point to the slight drop in UK annual inflation as a trigger but in my view, it doesn't change much ahead of the BOE policy meeting next month with core inflation still keeping well above the 2% threshold in September.

But the drop in cable also comes as the dollar trims losses across the board with AUD/USD backing away from 0.7500 to 0.7480 and EUR/USD down from 1.1650 to 1.1630.

Going back to cable, buyers have work to do in trying to breach the 100-day moving average @ 1.3800 and then the 200-day moving average (blue line) @ 1.3844.

As mentioned here yesterday, those are key levels which buyers could find some appetite to contest but a break above that and a run towards 1.4000 may be one step too far considering the fundamental backdrop at the moment.

As such, keep an eye on any turn in near-term sentiment with the 100-hour moving average resting at 1.3742. A break below that will see sellers turn the near-term bias to being more neutral and is a first step for any track back lower in cable.
Invest in yourself. See our forex education hub.

By continuing to browse our site you agree to our use of cookies, revised Privacy Notice and Terms of Service. More information about cookiesClose