Cable is faring better on the day on the back of a weaker US dollar but despite the greenback's slump since overnight trading, buyers are still unable to seize near-term control. Price now sits in between the key hourly moving averages with the 100-hour MA (red line) seen at 1.2504 and the 200-hour MA (blue line) seen at 1.2555.
Near-term bias remains more neutral at the moment and the inability for the pound to significantly recover against the dollar may spell further trouble down the road for cable in the bigger picture - once Brexit starts to come back into focus.
In the short-term, there is still potential for cable to rise slightly to test the 200-hour MA and for buyers to try and establish some upside momentum. However, unless the enigma that is Brexit is able to be sorted out, I continue to find it difficult to argue for a sustained move higher in the pound. The current Brexit equation sums that up pretty neatly.
As such, I would still be looking to sell cable on rallies as long as US yields aren't falling off in a dramatic fashion (though the dollar may still be choppy in the mean time). Right now, the dollar is still sensitive amid anticipation of the second day of Powell's testimony and CPI data to come. So, there's room to wait before assessing the situation again later on.
As for buyers, the risk to any trade would be cable falling back below the 100-hour MA and the 1.2500 handle. That will put sellers back in the driver's seat but in any case, there's money to be made on both sides if you define and limit your risk levels accordingly.