We are starting to see some notable moves on the week now with cable rising above 1.1500 for the first time in six weeks. The dollar is retreating further as bond yields are also falling, with 10-year Treasury yields down over 5 bps on the day to 4.058%. That is a far cry from the peak on Friday at 4.335%.
A push back above 1.1500 for cable will be a notable one as it will see buyers look to come up for air after a massive downtrend since the start of the year. That culminated with a push just under 1.0400 last month amid the whole Truss-Kwarteng mini-budget fiasco, but the tide has certainly shifted.
From a technical perspective, this is a good sign for the pound to make some waves against the dollar. A firm hold above 1.1500 will put into focus the 100-day moving average (red line) at 1.1747 next before potentially threatening the trendline support (white line) just below 1.1800.
As much as the fundamentals might dictate that the path of least resistance is likely for a move lower, the technicals have to be respected first and foremost and right now it is siding with buyers.
