Cable hits a high of 1.2509 on the day
The pound continues to surge – in part helped by EUR/GBP flows – with cable now rising above the 1.2500 on further short covering. The pair has broken above the key hourly moving averages (confluence around 1.2484) and also takes out offers at 1.2500.
With EUR/GBP set to snap eleven weeks of gains this week, the correction there could yet fuel further pound gains as we see more shorts being covered ahead and potentially after the ECB meeting tomorrow.
The break higher here is bullish for cable in the near-term but I’d be wary if gains start to stretch towards highs seen in the middle of the month around 1.2570-80. The pair is still very much in a cycle of posting lower highs and lower lows over the past few weeks so the first key level to watch out for will be the 18 July high of 1.2558.