The early fall doesn't bode well
Cable has been beaten up in the past two weeks. It's been a one-way fall from 1.3350 down to the current level of 1.2975 as hopes for a better deal on the backstop have eroded.
Technically, the low today of 1.2949 breaks four key levels:
- The 200-day moving average
- The Feb 22 low of 1.2968
- The 1.30 psychological level
- The 61.8% retracement of the late-Feb rally at 1.2993.
None of those alone is highly significant them all breaking together after seven straight days of selling is highly bearish.
There are a couple things the pound still has going for it:
- It's still early in the day, very early. I'd like to see these levels in action in UK trading rather than a low-volume open
- It's the end-game of Brexit, at least this round of it. The headlines are going to be coming fast and they're going to matter far more than any of the technicals. That said, the picture isn't exactly sunny on the fundamental side either.
