Technical Analysis

Cable pares losses as dollar continues to falter on the day

The greenback crumbles against the major currencies bloc


Cable is essentially flat on the day now as the pound recovers its earlier losses against the dollar with the latter continuing to look lost in light of softening risk sentiment in the equities space. The dollar’s haven status is looking all but gone now and that is generating into bids in other currencies as well as gold currently.

As for cable, price now is moving towards a test of the 100-hour MA (red line) @ 1.3171 after holding on to support levels from the 100-day MA and the 200-hour MA (blue line) earlier in the day.

Relative to other currencies, the pound is still weak as the stall in Brexit negotiations continues to weigh on the quid with talks only set to resume on Wednesday in Brussels. As mentioned earlier, that will continue to weigh on the pound but given the dollar’s own problems, cable buyers are finding a reason to push some bids back in the pair.

Looking at the current market conditions, trading cable right now is very much trading which of the two currencies is going to be more lackluster and less appealing. But given the risk of Brexit, the pound has more to lose/gain in any event during the near-term. The dollar’s stutter is more of a longer-term worry at this juncture but it is something that can very easily gather pace given the stretched positioning in the greenback.

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