Cable had a strong rally on Friday towards the 1.2500 handle but is beginning to fizzle out after buyers ran into key resistance from the 38.2 retracement level as well as the 100-day MA (red line) @ 1.2512.
For now, those two key levels are limiting the upside move as buyers lose some momentum amid news that Boris Johnson is still adamant on pursuing a no-deal Brexit outcome, if he can't strike a deal before 19 October that is.
As it stands, buyers are still firmly in near-term control in cable but unless they can break above the 100-day MA, there is little to suggest that this is a significant repricing in Brexit expectations that would allow the pound to run much, much higher.
But for any downside move, it still isn't a given either. Brexit headlines will be few and far between from now until October so expect choppier price action in the mean time.
I'd rather see price fall back below 1.2400 and challenge a break of the key hourly moving averages (100-hour MA @ 1.2377) in order to feel more confident of price retracing back towards 1.2000 potentially.
Today, we're seeing a bit of a pullback in the upside momentum but there is still no clear indications of a reversal just yet. Let's see how much conviction buyers have in making a break for it this week.