Cable touches a session high of 1.3080
The pound is squeezing in some bit-part gains on the day as the latest UK CBI report showed that quarterly business optimism among UK factories jumped to its highest level since April 2014 - rebounding from -44 in October last year to +23 in January.
Overall factory activity remains weak and tepid but the rise in business optimism is giving hope that the situation could improve in the months after the election.
That has allowed buyers to nudge price higher a little to move towards the overnight high, which was capped by resistance around 1.3081. From a technical perspective, buyers still hold near-term control as price keeps above the key hourly moving averages.
However, any move above the 1.3100 handle and last week's high of 1.3118 remains wanting and needs further validation from post-election PMI data on Friday.
Meanwhile, any push lower to the downside is also seen struggling around support near 1.2955-60 as we saw last week and on Monday this week.
It's all about the BOE now but market players are seemingly less confident about a rate cut now than they were at the end of last week. Odds of a 25 bps rate cut next week are sitting at ~57%, down from ~70% on Friday last week.
I reckon the post-election PMI data will be the key to give pound buyers/sellers the needed conviction to go chasing a move but for now I would expect the range above to still play out over the next few sessions.
