Cable treads under key daily moving averages but isn't running away just yet
With any other major chart, you'd probably already see a technical breakdown by now. However, the pound is a special exception as cable slowly inches lower after breaking out of the triangle consolidation pattern over the past month and then also falling below the 100 and 200-day moving averages (red and blue lines respectively) in overnight trading.
There is some support seen around 1.2925 before further support is seen closer to 1.2900 alongside notable bids.
But back to the point, the technical bias here indicates a move lower for the pair but there's one major caveat still preventing such an extension for the time being. That is of course Brexit.
The fact that Brexit developments have gone quiet really means that it's hard for traders to go chasing after any moves in fear that one headline is all it takes to reverse sentiment completely. It is something we're now accustomed to over the past half-year of trading the pound.
That said, the fact that talks between the government and Labour aren't really making any real progress will also limit the scope for any upside in the pound in my view. Hence, on the balance of things, the pound will stay pressured as long as the Brexit impasse continues to drag on and as May's position as prime minister continues to be threatened.
