GBP/USD saw a dramatic drop in trading yesterday, falling from a high of 1.3267 to 1.3100 and is holding just under there for now
The turnaround in the dollar yesterday hit cable rather hard, as price action slumped from a high of 1.3267 - failing to test the 31 December high @ 1.3284 - to lows around 1.3100 and price is now trading just under there to start the session.
The fall saw sellers take out both key hourly moving averages, with the break under the 200-hour MA (blue line), now @ 1.3104, keeping the near-term bias in their favour.
There is some minor support around 1.3067-74 for the time being but for buyers, they need to work their way back above the 200-hour MA @ 1.3104 to wrestle back more near-term control. Otherwise, sellers are keeping in a good spot to start the day.
It is tough to draw any heavy conclusions with how the market has moved so far this week, as we essentially just reset the Monday and Tuesday moves in trading yesterday and that leaves us back to the drawing board in August trading once again.
Trading sentiment isn't helped by the fact that this happens to be one of the more quiet times in the year but also as stocks now retreat after hitting all-time highs on Tuesday.
The technical levels for cable will offer a better sense on what the bias will be moving forward with any upside potential needing to break the key hourly moving averages firstly.
As for a further downside shove, support around 1.3067-74 is holding for now before we see further support closer to 1.3050. But the key level to watch will be 1.3000-10 as that has helped to keep a floor on price action over the past three weeks or so.
