February 05, 2024 11:51 GMT
GBP/USD Range Breakout Could Be Significant
- GBP/USD inches to new daily and pullback lows into NY hours, once again narrowing the gap with key support at the 1.2564 200-dma. The break below 1.2597 today is deemed technically significant and marks the end of the consolidation phase and a range breakout since the turn of the year.
- As mentioned across other instruments, volumes are very healthy early Monday, aided by Powell's seemingly hawkish undertones in his 60 Minutes appearance overnight.
- Currency futures volumes are no different, with the latest downtick in GBP helping futures to print activity >30% ahead of average for this time of day. Spot drift has dragged prices away from the larger option expiries for the Monday cut: £335mln rolling off at 1.2600 and £1.4bln at 1.2645-50.
- BoE's Pill is set to appear later today, however his appearance on Friday may mean new policy messaging is limited, with ISM Services likely a bigger needle mover today.