The Fitch ratings downgrade on the UK also isn't helping the pound
Cable is continuing its trip lower on the day as price backs further away from a test of 1.2500 to fall to 1.2335 currently. European trading flows are kicking in and the weekend downgrade by Fitch on the UK from AA to AA- with a negative outlook isn't helping the pound.
Meanwhile, the dollar continues to hold its ground as it is pushing gains against the rest of the major currencies bloc as well. USD/JPY is back up to 108.00 with EUR/USD near the lows for the day around 1.1069 at the moment.
The overall risk mood is starting to sour as well with European equities extending losses across the board as the market tries to settle on a firm narrative to start the week.
In looking at downside levels, a key risk for cable's upside momentum is a drop back below 1.2300 and firmly below the 50.0 retracement level @ 1.2306.
That will give sellers some edge in trying to push price back lower over the next few sessions so look out for that in coming hours.
As for dollar momentum, I'd argue that the EUR/USD and USD/JPY charts are the more prominent ones to pay attention to as they start to hone in on the key daily moving averages amid the dollar recovery seen today.
