Cable pares drop from weaker-than-expected GDP data


Cable is back up to 1.2930 on the day

GBP/USD 5M 11-02

Bids and support around the 1.2900 has helped to stop the decline earlier following the disappointing December and Q4 GDP report. The dollar has also weakened slightly following earlier gains but what this means is that we’re basically back to square one for cable again.

I’ve been hammering home the point for many a time now. It’s all about Brexit for the pound currently. Economic data and the BOE are very much secondary at this point. And today’s data release proved that once again, not to much surprise as noted in the calendar preview:

GBP GDP preview

Now that we have seen price action retrace back the knee-jerk reaction, it’s back to gauging the Brexit outlook. For cable, the consolidation range around 1.2930-50 is back in play. With price now settling here, watch out for resistance at the 100-hour MA @ 1.2945 followed by Friday’s high @ 1.2980. Expect plenty of choppiness still to come between these levels.

But so long as price holds below 1.3000, I’d still be inclined to offer the pair near the figure level as Brexit uncertainty continues to play out.

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