Cable since November is emblematic of the broader market. It carved out a range only to make fake breakouts on both sides.
Rate hike expectations have moved up in the UK but they've moved up even more on the US. That's led to a push and pull in this pair, along with deep uncertainty about growth and how long rates can stay high.
Technically, it's been a mess. The break downside in March came as bank worries threatened to spread to the UK but that turned out to be a false alarm. On the upside, UK inflation provided a very real opportunity for a break but it's floundered. That was punctuated at the start of this month by a series of doji stars, followed by a nasty pair of candles that took it back into the range.
Now it's sinking further on broad USD strength and is below the mid-April lows and the 38.2% retracement of the rally since March. That leaves this pair on track for a test of the 1.22 range and rudderless trade heading into the summer.
What comes next will depend on the scenarios that central banks have laid out. They expect inflation to fall but it's not falling quickly enough and that raises the risk that it will get stuck at 3-4% and -- potentially -- even more rate cuts. Alternatively, growth could slow and potentially pave the way for a soft landing and rate cuts starting in 2024.
For traders, that means watching data and the next big events will be Friday's UK retail sales data and the US PCE report.