Cable is sitting above the 1.2900 level as we await UK PMI data
The pound is keeping firmer on the day alongside the euro as the dollar is struggling a little during the European morning session. Despite hitting fresh lows for the year, cable managed to climb back up in overnight trading to close above support @ 1.2872.
Right now, price is back up above 1.2900 near session highs around 1.2915-25 as we look towards the UK PMI data release at the bottom of the hour.
The euro area releases earlier were encouraging but the UK backstory is a little bit different, as we have to see whether or not the post-election euphoria is sustainable.
Given price action this morning, I reckon a solid beat could help cable get a bit of a lift back towards testing 1.2950 with the 100-hour moving average @ 1.2960 and the 100-day moving average close by @ 1.2961.
Those will be key levels to watch for in case of an upside extension today.
However, disappointing readings should lend sellers a helping hand to try and drive price back below 1.2900 with key daily support seen @ 1.2872 as noted above.
I would argue at the start of the day that the play was to sell-on-rallies closer to 1.3000 but the price action this morning is hinting at a possible change in sentiment against the dollar after the euro area readings earlier; so that changes the picture quite a bit.
Let’s see what the data has to offer and what price action says after, and if there is any further risk response in the hours ahead.