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Cable Hits Daily Highs as Yields Retreat

GBP
  • GBPUSD inches to a new Monday high, showing north of the European morning's 1.2185 print and just above the post-Powell highs of 1.2192. Move mirrors the retreat in 10y yields well back below the 5.00% mark, as markets fail to sustain the one-way pressure on bonds through the US crossover.
  • Progress for the pair now looks to 1.2211 for direction - the Oct 18 high - but there's still a solid gap with the key upside level of 1.2337 - the recovery high. For now, technical signals remain bearish, with the formation of a death cross last week (50-dma < 200-dma) for the first time since August 2021.
  • Labour market data is the next focus, however tomorrow's release will be incomplete due to statistical adjustments to ONS processes - meaning markets will not receive the Labour Force Survey data, and therefore no fresh update for the unemployment rate.

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