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FOREX: Cable Resistance Holds, Medium Term Signals Bearish

FOREX
BulletMarketsForeign Exchange Bullets
  • Tariff rhetoric overnight has provided some renewed demand for the greenback, and this has allowed GBPUSD to soften around 0.6% on Tuesday, pressing fresh session lows around 1.2420 in recent trade. Significantly, cable tested resistance at the 50-day EMA on Monday (intersecting today at 1.2520), and with this level holding, medium-term signals remain bearish for the pair.
  • Key event risk for the pair centres around the FOMC press conference, while support levels remain much lower than current spot, initially at 1.2229, the Jan 21 low, and the bear trigger at 1.2100, the Jan 10 low.
  • Fiscal matters remain in the spotlight this week with Chancellor of the Exchequer Rachel Reeves due to deliver a speech on Wednesday regarding how the government intends to boost economic growth, with a focus on planning reforms to boost house construction.
  • This week will also see four members of the FPC (including Governor Bailey) testify, however comments will need to be constrained to financial stability matters given the monetary policy quiet period.
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  • Tariff rhetoric overnight has provided some renewed demand for the greenback, and this has allowed GBPUSD to soften around 0.6% on Tuesday, pressing fresh session lows around 1.2420 in recent trade. Significantly, cable tested resistance at the 50-day EMA on Monday (intersecting today at 1.2520), and with this level holding, medium-term signals remain bearish for the pair.
  • Key event risk for the pair centres around the FOMC press conference, while support levels remain much lower than current spot, initially at 1.2229, the Jan 21 low, and the bear trigger at 1.2100, the Jan 10 low.
  • Fiscal matters remain in the spotlight this week with Chancellor of the Exchequer Rachel Reeves due to deliver a speech on Wednesday regarding how the government intends to boost economic growth, with a focus on planning reforms to boost house construction.
  • This week will also see four members of the FPC (including Governor Bailey) testify, however comments will need to be constrained to financial stability matters given the monetary policy quiet period.