Cable Attempts to Rally Thwarted Below $1.30
|S1 $1.2874||R1 $1.2917|
|S2 $1.2840||R2 $1.2947|
|S3 $1.2770||R3 $1.2979|
Cable has rallied from its recent lows circa $1.2770 but has been unable to move back through $1.30 held back by a combination of concerns over Brexit, market positioning and the relative performance of the Euro.
GBP bounced from the low of $1.2774 and moved above the 200 day EMA line, a bullish sign. Sterling then gapped up at the open to $1.2900 and traded to highs of $1.2947. Tuesday’s high has been $1.2979. That high formed the wick of a “high wave” candle showing a clear rejection of that higher level.
Recent Sterling macro data has been mixed, as the Dollar continued to weaken on political fall out in DC and heightened international tensions. Markets are heavily discounting further US rate rises in 2017. But Sterling has been held back by Euro strength (+8.5% YTD vs GBP) and Brexit concerns that limit GBPs ability to move higher against the US dollar. As such $1.30 is a key level to watch in cable.