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Cable Breaches Key Support, Highlights Broader Medium-Term Reversal

GBP
  • GBPUSD has extended declines to 1.65% on Tuesday amid the broad greenback strength backdrop. This retains the bearish trend condition and support at 1.1915, the Feb 17 low, has given way. Clearance of this level has confirmed a resumption of the bear leg.
  • Furthermore, price has now breached key support at 1.1842, the Jan 6 low, which highlights a broader medium-term reversal threat and a potential double top pattern on the daily chart. Below here, the focus turns to 1.1764, the November 17 low.
  • With no UK data points on Wednesday, attention will be on potential comments from BOE MPC member Swati Dhingra, due to speak about the cost-of-living crisis at an event hosted by the Resolution Foundation, in London.
  • Later this week on Friday, markets will receive UK GDP data for January as well as manufacturing and industrial production figures. The broader emphasis for cable will remain on the US labour market report.

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