Cable tests 1.3000 again as dollar firms as stocks slump

Technical Analysis

Author: Justin Low | gbpusd

GBP/USD hits a session low of 1.3000 as the dollar firms

European stocks are bleeding further to kick start the session, with the DAX now posting a drop of over 3% alongside the CAC 40. Other indices are down by over 2%.

Regional stocks are hitting multi-month lows currently as the technical backdrop doesn't look too good ahead of imminent shutdowns in Germany and France.

US futures are also down by over 1% currently as the risk mood softens.

That is helping the dollar firm on the session with cable now falling to a low of 1.3000.

GBP/USD H1 28-10
For cable, the 1.3000 level has proven to be a key near-term support in the past two days but buyers were also able to lean on the 200-hour MA (blue line) previously.

That level appears to have given way on the drop here so I would argue that there is less conviction for buyers to defend the figure level at this stage; especially when the risk backdrop continues to be more dollar supportive in general.

Looking beyond a drop of 1.3000, there might be little in the way stopping a drop towards the 1.2900-10 region next and that is likely the next target for sellers.
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