Cable rises to a high of 1.2380 before coming back down to lows of 1.2330
With little on the Brexit agenda between now and October, the pound may be set for more choppy price action like the one we’re seeing to start the European morning.
It’s hard to read anything into the moves here as cable tries for a run higher earlier only to fail around 1.2380-85 (there is minor daily resistance around 1.2382) and then fall back now to session lows close to 1.2330.
As mentioned yesterday, the key line in the sand for any upside move in cable will be the key hourly moving averages. As such, the 100-hour MA (red line) @ 1.2292 will be the key spot to watch in the sessions ahead.
Break below that and sellers will regain some near-term control in potentially driving price lower. But as said yesterday, it’s all going to be a bit messy now for the pound and I reckon the “real range” can extend from 1.20 to 1.25 given current Brexit developments.
We’ll only have more clarity closer to the European Council summit on 17-18 October so in the mean time, just keep an eye on the technicals for a sense of how sentiment is moving.