Will Cable Continue its Decline
A strong start to the week just past saved from posting another losing week. However with it closing over a hundred points off its high, and this boosted by a late rally on Friday afternoon cable would seem destined to continue on its downward spiral over the next few weeks. There is in fact a critical line of resistance level at 1.2235 that needs to break and hold above, if it is to turn the momentum around.
The view from the market though seems to suggest that this, in the short term at least is unlikely. Danskebank are predicting that cable will lose further ground against both the US dollar and the #Euro:
We believe the British pound will weaken further against both the USD and the EUR, but that will play out over the coming 3-6 months. It will be ‘sell the rumour, buy the fact’ with respect to the UK’s triggering of article 50 and the GBP is likely to strengthen later in 2017
They are not alone with Scotiabank seeing cable move down toward the 1.20 level if it cannot sustain above the 1.2200 handle:
#GBPUSD short-term technicals:… Weakness below support in the low/mid 1.22 area suggests that near-term risks are tipping more obviously lower again. We see minor support at 1.2200/10 intraday but little else ahead of renewed push under 1.20. Trend strength signals are aligned bearishly on the short, medium and long term charts – implying little scope for sustained, counter-trend corrections.