Cable slightly weaker on the day but buyers still stay in near-term control

Technical Analysis

The pound continues to bend but not break for now


The pound is holding lower on the day but is off lows seen at the start of the session as cable sits near 1.2875 currently after a low of 1.2840 earlier.

It is all about the anticipation ahead of the meaningful vote in parliament tomorrow now for the pound. As such, headline risk is once again a key factor in driving sentiment ahead of the weekend but is expected to be not as hectic as the past few days.

Other than that, just be mindful of positioning movement as we close out the day later as market participants may want to square their positions ahead of the key risk event taking place over the weekend.

For cable, the near-term trendline support since last Friday continues to be a key level that buyers are leaning on – allowing the upside momentum to continue. The 100-hour MA (red line) @ 1.2742 is also another key level to eye in that regard.

Despite the DUP establishing they will not vote in favour of Johnson tomorrow, price action suggests that traders are keeping up hope that a Brexit deal can pass in parliament.

If anything else, just be wary of a potential gap at the open next week – whatever the outcome may be.

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