Pound bears are in store for a bit of pain in the near-term
It's a breakdown across most charts for the dollar as the near-term momentum in cable has also shifted to side with buyers for the time being. Price broke above the 200-hour MA (blue line) in overnight trading and that means that the near-term bias now favours buyers more.
As the dollar continues to falter today, the near-term upside for cable looks very attractive for the time being. Offers and minor resistance is seen at 1.2850 but beyond that there isn't much to pin point apart from the 1.2900 level in the near-term and thereafter it's resistance at 1.2958 followed by the 1.3000 handle.
From May to July, cable has been in a channel of lower highs and lower lows. That ultimately broke to the downside in August in a sharp move lower from 1.3100 to a low of 1.2662 in a span of two trading weeks. If that is any indicator, it means that the retracement in the pair that is to come will be a sharp and painful one. The squeeze is on.
