Dollar catches a bid and sends cable to its lowest level since 16 January

GBP/USD H1 14-02

The dollar is getting bid across the board as it recovers against the rest of the major bloc with EUR/USD, USD/CHF and USD/CAD all moving back to flat levels on the day. Meanwhile, GBP/USD has moved to a low of 1.2826 after having earlier moved to highs of 1.2878 near the 61.8 retracement level.

Currently, price is attempting to break the support seen from the lows in mid-January of around 1.2831-32. If there is firm hourly close below that, it will open room towards the 1.2800 handle next.

For cable, there will be a couple of risk events coming up in the day ahead. The most notable of which will be the Brexit debate in parliament. Depending on headlines there, it could help to skew bias in the pound. That said, I wouldn't expect much significant direction given the way Brexit is developing and Theresa May is still seeking to buy more time for her deal over the next few weeks.

Hence, the anticipated risk event will be US retail sales data due at 1330 GMT. Much like the CPI report yesterday, that will play a part in determining dollar direction in the session ahead.

Regardless though, the near-term sentiment in cable remains more bearish and after yesterday's whipsaw to test the 200-hour MA (blue line), the fact that sellers easily took back control means that the pair is still poised for more downside as long as Brexit developments continue to stall and US-China trade talks remain more optimistic.