Yesterday it was Swissy, today Cable. This market has an attention deficit!
Cable has seen demand from the very folks who’ve been hammering it for days, model funds, momentum guys, the short-term players looking for the next 2-3% move. Much of what we’ve seen is short-covering but that covering is improving the technical picture to the point where fresh money is being drawn into the pound. 1.4300/05 is a viable upside target in the next few days. 1.4000 and 1.3950 are support on pullbacks near-term.
EUR/GBP is sort of the mirror-image of cable, looking toppy now. 0.9075 is the downside target if downside momentum can be sustained.
Given that a rally in US bank stocks helped start the recent rebound in global equities, it makes sense that the pound would benefit directly from rising bank shares as the UK economy’s reliance on financial services has been a prime factor in undermining the pound.
Booking of EUR/GBP profits is helping take the shine off of EUR/USD. 1.2870 is providing support intraday. A break puts 1.2730 back in play.