The euro’s woes are dragging the pound down, boosting the dollar
Cable now looks towards a test of the 100-hour MA (red line) after initially dipping below the 200-hour MA (blue line) to around 1.2850 and then the euro’s dip sent the pair lower towards 1.2830 currently. It can be argued that this is a bit of an overdue one for cable sellers following yesterday’s jolt higher on the back of the EU-UK draft text on futures ties being agreed.
As mentioned then, nothing has changed ahead of Sunday’s summit and the agreement there doesn’t change the fact that May still faces a monumental task in winning over parliament when it comes to a meaningful vote.
As for technicals, if sellers drive price below the 100-hour MA, the near-term bias turns more bearish and we’re looking at move to test the 1.2800 handle as well as the 16 November support @ 1.2777. The latter will be the key level I’ll be looking at as that will be an area buyers will have interest to lean on to halt any further break to the downside in the near-term.