Cable continues to see limited rise to 1.3700 for now

Fx Forex 1 week ago

0 4 1 minute read

GBP / USD retains a more bullish bias in the short term, but gains remain limited by the handle of 1.3700 trading this week

While the dollar has been struggling a bit lately, the pound also remains more resilient as we see the cable testing Jan 4th highs near 1.3700 yesterday.

The upward push stalled at the key level before retreating to the swing region around 1.3620-30 as buyers continue to maintain a more short-term bullish bias in the pair.

The key near-term region to watch in this regard is the confluence of the major hourly moving averages at 1.3590-94, the focus of Powell and Biden’s speeches today.

The pound side of the equation is basically that, because in the quid we manage to dismiss economic concerns regarding the UK viral situation and the post-Brexit ordeal.

I would still say these problems can still bite the pound later, but the downward push in EUR / GBP makes a case that is not yet the time for that.

It all depends on the dollar side of the equation for now as we look into the upcoming trading day and the major risk levels can be defined and limited on either side as above.

Go past 1.3700 and there is a clear path (at least from a technical point of view) for the cable to potentially target 1.4000 next. On the flip side, a boost below the major hourly moving averages will see sellers regain control and look towards the swing region around 1.3540-50 then before the 1.3500 grip kicks in.
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