Cable dips to session low as the pound follows the euro down
GBP/USD touches a low of 1.2938
And price closes in on yesterday's low seen at 1.2937. Sellers remain in near-term control of the pair as price continues to hold below the 100-hour MA (red line) in trading. Yesterday's spike from news that the EU is willing to offer a UK-wide customs agreement was short-lived as it came with a caveat that it has to be a separate treaty from the withdrawal agreement. As mentioned then, such a proposal won't fly with the UK and it was swiftly rejected by Theresa May's spokesman and the euphoria faded.
Since then, cable traded tepidly in light of action in the equities space but as the euro is dragged lower on the back of softer economic data the pound has followed suit as the session begins. GBP/USD is at a point where either a double-bottom forms at the current price or a further break is on the cards.
With Brexit rhetoric still seen going nowhere any time soon, it's hard to imagine any bounce moving past the 100-hour MA and I'd still be looking towards shorts in the pair and fading rumours on Brexit progress at this point.
The daily chart isn't too encouraging for buyers as well as price continues to move further away from the 100-day MA (red line) and now looks to be attempting a break of the July low @ 1.2958. There is some support to be had from the October low @ 1.2925 but if that gives way, there isn't much else left standing in the way of a retest of the year's lows.
But once again, be wary that it's still all about Brexit headlines and no matter how quiet they have gone or anything else, it's still the number one factor driving the pound so make sure you keep your emotions in check if price moves against you on either side of the headlines. Because that's the risk associated with trading the pound these days.