Cable is up by 1.7% on the week so far as the pound gradually climbs higher over the past two days as the dollar consolidates gains seen over the past three weeks.
In turn, cable has moved from 1.1500 to just above 1.1800 since the start of trading yesterday, with price moving above the 100-hour MA (red line) in the process.
This means the near-term bias in the pair is now more neutral as buyers approach minor resistance around 1.1878 with the 23.6 retracement level @ 1.1834 also one to watch.
The key test though will be the 200-hour MA (blue line), currently at 1.1892.
If buyers can break above that, then the near-term bias will turn more bullish and there is scope for further retracement in the pair after hitting multi-decade lows.
The issue though, is all the moving parts still at play. Today, we saw the US Congress approve the stimulus bill and that is keeping the calm in the market. But can that last?
That also ties to dollar funding pressures and then we also have to consider the risks of a spike in cases in both the UK and the US with lockdown measures just beginning.
There's also the fact that cable valuation is so low and cheap that this presents a rare opportunity for long-term investors to capitalise on.
Then, tomorrow we can look forward to a showstopping US initial weekly jobless claims report and the market may choose to react to that as well.
While we can't control the moving parts, at least we can try to define and limit risk on our convictions based on the technical levels that are presented to us.
For now, the near-term bias is still more neutral and the next key trade will be a firm break on either side of the key hourly moving averages. As such, despite the recent upside move, buyers still have more work to do to secure a firm upside break in cable.
As for sellers, the 200-hour MA and minor resistance around 1.1934 presents some levels to lean on in case the developments start to favour the downside again.